Nov. 7 (Bloomberg) -- European stocks rebounded from a one- month low as better-than-expected earnings at companies from Swiss Reinsurance Co. to Delhaize Group SA fed investors’ expectations a seven-month rally will go on.

Swiss Re, the world’s second-largest reinsurer, and Delhaize, the owner of Food Lion supermarkets, both gained more than 7 percent. BNP Paribas also rose after beating analysts’ estimates, while Royal Bank of Scotland Group Plc tumbled 12 percent after it ceded greater control to the government.

The Dow Jones Stoxx 600 Index rose 1.7 percent to 241.06 through Nov. 6, climbing from the lowest level since Oct. 5 and posting its first gain in three weeks. The Euro Stoxx 50, a measure for the largest companies in the euro zone, climbed 1.9 percent.

A global rally in equities lost pace in October on concern the rebound has gone too far relative to the prospects for economic growth. The Stoxx 600 is still up 53 percent since March 9 even after dropping 2.3 percent last month.

“For the management teams that have a good track record of managing their businesses tightly and with a strong business franchise, it will be an environment in which decent earnings and cash flow growth will be seen,” said Mark Lovett, chief investment officer for European equities at RCM Ltd. in London. “Under these conditions equities can deliver good capital returns.”

National Benchmarks

National benchmark indexes advanced in all major western European markets except Sweden. The U.K.’s FTSE 100 rose 2 percent and France’s CAC 40 surged 2.8 percent. Germany’s DAX added 1.4 percent as Adidas AG increased.

Indexes fluctuated in the last session as unemployment in the U.S. soared to a 26-year high of 10.2 percent in October and employers cut more jobs than forecast. Economists had expected a jobless reading of 9.9 percent. Temporary workers rose by 34,000, the third consecutive gain.

The European Central Bank on Nov. 5 took its first step toward removing emergency stimulus measures designed to haul its economy out of recession, saying it won’t offer commercial banks 12-month loans next year.

Earnings have topped analysts’ estimates at 137 of the 214 companies in the Stoxx 600 that have announced results since Oct. 7, according to Bloomberg data. In sales, 123 companies have disappointed while 105 had positive surprises.

Swiss Re

Swiss Re soared 14 percent to 47.82 francs after reporting an unexpected third-quarter profit. Net income was 334 million Swiss francs ($327 million) on investment gains and as fewer catastrophe claims boosted property and casualty earnings. That compared with a year-earlier loss of 304 million francs and the median estimate of analysts for a 51 million-franc loss.

Delhaize added 7.5 percent to 49.65 euros. The Brussels- based retailer reported profit that rose more than analysts’ estimates and raised its forecast for the year. The company obtained improved buying terms for its own-branded goods and reduced inventory losses, enabling the food retailer to lower prices without squeezing its own margins.

BNP rose 7.2 percent to 55.17 pence. The bank said third- quarter profit rose 45 percent, helped by the purchase of Fortis assets and a rebound at the investment bank. BNP reported net income of 1.31 billion euros ($1.9 billion), higher than the 1.26 billion-euro median estimate of 13 analysts surveyed by Bloomberg.

RBS

RBS fell 12 percent to 37.06 pence. Britain’s biggest government-controlled bank said this week it will get a total of 45.5 billion pounds ($75 billion) in capital from the British taxpayer, the world’s most expensive bank bailout.

The 70 percent government-owned lender will also sell its insurance assets, more than 300 U.K. branches, an investment banking division and a credit card payment unit to win European Union approval for taxpayer aid. The company had a third-quarter loss after 3.3 billion pounds of provisions for bad loans and credit-market writedowns.

Bank of Ireland Plc, the nation’s largest lender by market value, jumped 17 percent to 1.99 euros. The bank stuck with its forecast for loan losses in the three years through March 2011 and said the pace of economic decline may be easing. Allied Irish Banks Plc rallied 2.6 percent to 1.921 euros.

Adidas added 8.7 percent to 34.24 euros. The world’s second-biggest sporting-goods maker reported third-quarter net income of 213 million euros, topping analysts’ estimates for 210.8 million euros.

Clariant

Clariant AG rose 11 percent to 10.92 francs after it predicted earnings will increase in the fourth quarter from a year earlier as the benefit of job cuts and plant closures raises profitability.

Software AG added 15 percent to 69.51 euros. Germany’s second-largest software maker raised full-year targets for revenue and profit margins after the integration of IDS Scheer AG.

ITV Plc jumped 15 percent to 48.96 pence after the U.K.’s biggest private television company predicted advertising sales will rise in December and said the overall market is “stabilizing.”

Genmab A/S slumped 15 percent to 113 kroner after the Danish biotechnology company said it will post a 2009 operating loss of $228 million compared with a previous forecast of a $127 million loss.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.

Last Updated: November 7, 2009 04:11 EST