European stocks rose as Credit Suisse First Boston advised investors to increase their holdings of shares in the region, saying cost cutting will help lift corporate profits.
ThyssenKrupp AG, Germany's largest steelmaker, climbed after forecasting a "considerable" gain in earnings this fiscal year because it is raising prices. Skandia AB surged as Prudential Financial Inc. agreed to buy the US business of the largest Nordic insurer for US$1.27 billion.
The Stoxx 50 Index added 1 percent to 2,456.29. The benchmark has advanced 6.1 percent since Sept. 30, and is poised for its first quarterly gain this year. It lost more than a third of its value in the previous three quarters. For the week, the Stoxx 50 has added 0.3 percent.
"The bear market ended in September," said Bob Parker, deputy chairman of Credit Suisse Asset Management, which has US$303 billion under management. ``We're forecasting global equity returns for the next two years of 5 to 7 percent a year.'' Twelve of the 17 western European benchmark indexes rose today. Germany's DAX Index climbed 2.1 percent. The UK's FTSE 100 advanced 1.3 percent and France's CAC 40 Index added 0.9 percent.
The Stoxx 600 Index gained 0.9 percent. Retailers were the only industry to fall after a report that French consumer spending dropped in November.
CSFB, a unit of Credit Suisse Group, advised investors to increase their holdings of stocks in the 12 countries that share the euro, citing the benefits of cost cutting and optimism the European Central Bank will lower interest rates to boost economic growth.
The bank increased its recommended allocation for euro-region stocks to 10 percent more than they represent in the Morgan Stanley Capital International All Country World Index, from 3 percent more.
ThyssenKrupp AG added 7.7 percent to 10.88 euros, paring its decline this year to 34 percent. The steelmaker raised prices three times this year and plans a fourth increase in January.
Along with rivals Arcelor SA and Corus Group Plc, ThyssenKrupp reduced output after prices fell to 20-year lows.
Corus Group Plc, Europe's second-largest steelmaker, jumped 18 percent to 26 pence, trimming its drop this year to 64 percent.
Skandia added 22 percent to 25.5 Swedish kronor. Prudential will pay US$1.15 billion in cash for the US business and assume a US$115 million tax liability, the companies said. Skandia shares jumped on optimism the money will reduce debt and boost its credit ratings.
S&P today kept Skandia's rating at BBB after reducing it in October. Moody's Investors Service said it may raise the rating for Skandia and its unit Skandia Capital AB.
"Now they have a chance of cutting their debt burden," said Johan Lannebo, who helps manage about 1.9 billion kronor (US$214 million) at Lannebo Fonder in Stockholm.
The Stoxx 50 and Stoxx 600 indexes are headed toward their third straight yearly declines amid concerns that Europe's sluggish economic growth may restrict profit gains. This year's losses will be the biggest for the benchmarks since 1987, when their history began.
Stock gains today were limited by a report that showed French consumer spending dropped the most in four years last month.
French shoppers bought 1.7 percent fewer manufactured goods than in October, the government said. Economists expected a 0.1 percent drop. Kingfisher Plc, a UK retailer which made almost half of its sales in France last year, dropped 0.8 percent to 215.25 pence.
Italy's consumer prices rose at the slowest pace in six months in December as retailers offered discounts to lure holiday shoppers, reports from 12 cities today showed.
Adidas-Salomon AG, the world's second-biggest maker of sporting goods, gained 4.1 percent to 82.90 euros. Puma, Europe's No. 3 maker of sports goods, added 0.4 percent to 68.30 euros.
Puma has doubled in value this year.
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