Nov. 18 (Bloomberg) -- European stocks rose as higher oil prices lifted energy producers and better-than-expected earnings from Hewlett-Packard Co. and Home Depot Inc. eased concern the recession will snuff out profits.

Total SA, Europe's third-largest energy producer, and BP Plc climbed more than 4 percent as crude gained. Alcatel-Lucent SA jumped 4.8 percent on Dassault Aviation's 1.56 billion-euro ($2 billion) offer for Alcatel's stake in Thales SA.

The Dow Jones Stoxx 600 Index added 0.8 percent at 201.91 in London, reversing an earlier decline of as much as 2.2 percent. The gauge has lost 45 percent this year as writedowns and credit losses topped $965 billion in the worst financial crisis since the Great Depression.

U.S. earnings are ``reassuring the market,'' said Arnaud Scarpaci, a fund manager at Agilis Gestion in Paris, which oversees $152 million. The market ``seems oversold,'' he said.

The Stoxx 600 is valued at 9 times reported earnings of the companies in the index, below the four-year average of 14 times profit. The gauge traded at 7.9 times earnings in Oct. 27, the lowest since at least January 2002.

National benchmark indexes increased in nine of the 18 markets in western Europe. The U.K.'s FTSE 100 rose 1.9 percent, and France's CAC 40 gained 1.1 percent. Germany's DAX added 0.5 percent.

Total climbed 4.6 percent to 40.76 euros. BP, Europe's second-biggest oil producer, added 4.1 percent to 507.5 pence, and Royal Dutch Shell Plc, the largest, gained 3.9 percent to 1,693 pence.

Oil Gains

Crude oil for December delivery rose 75 cents, or 1.4 percent, to $55.70 a barrel in New York.

Alcatel-Lucent jumped 4.8 percent to 1.90 euros. Dassault Aviation offered 1.56 billion euros ($2 billion) for Alcatel- Lucent's 20.8 percent stake in Thales SA.

Earnings from Hewlett-Packard, the world's biggest maker of personal computers, and Home Depot, the largest home-improvement retailer, signaled they are withstanding the economic slowdown. Banks led declines earlier today as concern the economic slowdown will trigger more losses, while Burberry Group Plc's forecast disappointed investors.

BNP Paribas SA dropped 5.1 percent to 40.81 euros. UBS AG, the Swiss bank that got a $59.2 billion aid package from the state and central bank, lost 3.5 percent to 13.27 francs.

The cost of protecting bank bonds from default rose to the highest in almost a month as prices of mortgage-linked securities tumble.

Burberry

Burberry, the London-based luxury goods company, slid 13 percent to 175 pence after saying pretax earnings may be at the ``mid to lower'' end of analysts' projections in the current fiscal year.

Earnings for the 1,829 companies in western Europe that reported results since Oct. 7 declined 9.9 percent on average, trailing expectations by 6 percent, Bloomberg data show.

Analysts now predict profit will slide 10 percent in 2008, compared with 11 percent growth forecast at the start of the year, the data show.

Carphone Warehouse Group Plc slumped 9.4 percent to 118 pence. Europe's largest mobile-phone retailer said it won't sell the TalkTalk Internet unit as it considers splitting into two listed companies.

ERG SpA, Italy's biggest exporter of oil products, slipped 4.6 percent to 11.26 euros. Morgan Stanley gave it an ``underweight'' recommendation and a price estimate of 10.40 euros on the shares.

Bilfinger Berger AG, Germany's second-largest construction company, led construction shares lower after Goldman Sachs Group Inc. added the stock to its ``conviction sell'' list, citing expectations for lower capital spending in chemicals and oil industries. The shares lost 4.9 percent to 30.61 euros.

Hochtief AG, Germany's biggest construction company, sank 2.8 percent to 27.66 euros.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

Last Updated: November 18, 2008 12:13 EST