Nov. 24 (Bloomberg) -- European stocks rose the most in six weeks after the U.S. government guaranteed $306 billion of troubled Citigroup Inc. assets and Democratic lawmakers pledged a stimulus package for the world's largest economy by January.

Deutsche Bank AG and Credit Suisse Group AG gained at least 16 percent as the guarantee for Citigroup, which has $2 trillion of assets and operations in more than 100 countries, eased concern a flight of depositors might further erode confidence in the financial system. BHP Billiton Ltd. jumped 23 percent, helping send the U.K.'s FTSE 100 Index to its biggest gain on record, as metals and oil surged.

The Dow Jones Stoxx 600 Index 8.4 percent to 197.51, rallying from a five-year low. Stocks extended early gains after U.S. President George W. Bush said he's prepared to make other rescues like the one to help Citigroup and U.K. Chancellor of the Exchequer Alistair Darling pledged 20 billion pounds ($30 billion) of tax cuts and spending to spur growth.

``Citigroup is just too big to fail,'' said Roger Kunz, head of investment strategy at Clariden Leu AG in Zurich, which manages the equivalent of about $120 billion. ``It's good news as it brings some stabilization, another major player will be rescued.''

National benchmark indexes gained in all 18 western European markets. The FTSE 100 rose 9.8 percent as Anglo American Plc and BP Plc climbed. Germany's DAX added 10 percent, with Hypo Real Estate Holding AG surging 21 percent on a government debt guarantee. France's CAC 40 increased 10 percent.

The Stoxx 600 has fallen 46 percent this year after credit losses and writedowns approached $1 trillion and countries from the U.K. to Germany and the U.S. slipped into recession.

Economic Stimulus

The U.S. Congress will send President-elect Barack Obama an economic stimulus package the day he takes office Jan. 20, Democratic lawmakers said. Senator Charles Schumer of New York said on ABC's ``This Week'' program that the package will be between $500 billion and $700 billion. House Majority Leader Steny Hoyer of Maryland said on ``Fox News Sunday'' that he believed the Inauguration Day goal would be met. He declined to put a price tag on the bill.

Deutsche Bank, Germany's largest bank, rose 24 percent to 23.25 euros. Credit Suisse, Switzerland's second-biggest bank, gained 16 percent to 28.9 francs.

Citigroup will have troubled mortgages and other assets guaranteed by the government and will receive a cash infusion from the Treasury Department's $700 billion Troubled Asset Relief Program. In return for the cash and guarantees, the government will get $27 billion of preferred shares paying an 8 percent dividend.

`Music to the Market'

The Treasury, Federal Reserve and Federal Deposit Insurance Corp. said in a joint statement that the move aims to bolster financial-market stability and restore economic growth.

``The only good news is bailout news,'' said Felix Riley, head of binaries, a type of spread-betting, at ChoiceOdds in London. ``The Treasury's quasi-nationalization of Citigroup is music to the market's ears.''

Hypo Real Estate advanced 21 percent to 2.61 euros after the property lender received a 20 billion-euro ($25 billion) debt guarantee from the government's rescue fund.

The German Financial Markets Stabilization Fund granted the lender a ``framework guarantee to strengthen the group's liquidity,'' Hypo Real Estate said in a statement on Nov. 21.

UBS AG, which has posted $48.6 billion in credit-related losses and writedowns since the subprime crisis began, rose 21 percent to 13.78 francs. The Swiss government is willing to assist the country's biggest bank with more capital if financial markets don't calm down, SonntagsZeitung reported, citing Federal Banking Commission Director Daniel Zuberbuehler in an interview.

Barclays Rises

Barclays Plc climbed 10 percent to 146.5 pence as the lender won shareholder support to raise 7 billion pounds without surrendering control of its dividends and lending, Chairman Marcus Agius said.

The bank, the second largest in the U.K., got the required majority in a preliminary count and will get most of the money from groups in the Persian Gulf, Agius told Barclays shareholders today in London.

BHP Billiton, the world's largest mining company, jumped 23 percent to 980 pence. Anglo American, the fourth-biggest diversified mining company, rallied 23 percent to 1,390 pence. Copper, nickel, tin and zinc gained in London.

Cheapest on Record

BP, Europe's second-biggest oil company, increased 11 percent to 513 pence. Total SA, the region's third-largest, increased 12 percent to 41.30 euros.

Crude for January delivery rose 9 percent to $54.40 a barrel in New York as a weaker dollar enhanced the appeal of commodities.

The Dow Jones Stoxx Oil & Gas Index was valued at 4.9 times reported earnings of the companies in the index at the close last week, the lowest since records began in 1998.

Roche Holding AG climbed 7.7 percent to 162.1 francs after the drugmaker said new clinical trial data on the Avastin cancer drug showed the medicine helped women with breast cancer live longer without their disease progressing than chemotherapy alone.

Standard Chartered Plc fell 4.5 percent to 725 pence after the third-largest U.K. bank announced plans to raise 1.8 billion pounds ($2.7 billion) in a rights offer to bolster its finances as the global economic recession deepens.

The London-based bank is offering 30 new shares for 91 already held to existing shareholders at 390 pence each, or a 48.7 percent discount to the last closing price.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

Last Updated: November 24, 2008 12:40 EST