Nov. 6 (Bloomberg) -- German stocks extended their weekly advance as gains in Deutsche Lufthansa AG and carmakers helped offset a report that showed the highest U.S. unemployment rate in 26 years.

The benchmark DAX Index added 0.1 percent to 5,488.25, having climbed 1.4 percent this week. The measure is up 50 percent from the lowest level this year on March 6 amid signs that government stimulus policies and record-low interest rates are helping to drag the global economy out of recession.

German factory orders rose for a seventh month in September as exports helped the recovery in Europe’s largest economy to gather pace. Orders, adjusted for seasonal swings and inflation, advanced 0.9 percent from August, when they gained a revised 2.1 percent, the Economy Ministry in Berlin said today.

Lufthansa, Europe’s second-largest airline, climbed 3 percent to 11.06 euros as competitor British Airways Plc said declines in passenger traffic and ticket prices may have turned a corner. Deutsche Post AG, Europe’s biggest postal service, increased 1.1 percent to 11.93 euros.

Daimler AG climbed 1.7 percent to 33.21 euros after the carmaker said sales at its Mercedes-Benz unit rose 7 percent in October to 88,400 vehicles. Volkswagen AG added 1.3 percent to 109.18 euros. The company’s Audi luxury-car division raised its sales goal for 2009, the Frankfurter Rundschau newspaper reported, citing board member Peter Schwarzenbauer.

The DAX pared gains after the U.S. unemployment rate jumped to 10.2 percent in October. U.S. payrolls fell by 190,000 workers last month, compared with a 175,000 drop anticipated by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington.

Hannover Re, Escada

Hannover Re added 3.1 percent to 32.28 euro as Germany’s second-largest reinsurer raised its full-year profit target. Third-quarter net income was 159 million euros ($237 million), exceeding the median estimate of 148 million euros in a Bloomberg survey of 13 analysts.

Escada AG, the German luxury fashion maker that filed for insolvency in August, jumped 37 percent to 70 cents after saying the Mittal family trust agreed to buy its main assets.

Software AG, the country’s second-largest software company, climbed 3.7 percent to 69.51 euros as brokerages including Citigroup Inc., Commerzbank AG and UniCredit Markets & Investment Banking lifted their recommendations on the stock.

ProSiebenSat.1 Media AG rallied 7 percent to 7.66 euros. Morgan Stanley lifted its share-price estimate for Germany’s biggest private broadcaster 4.2 percent to 12.50 euros and kept its “overweight” stance.

Symrise AG climbed 6.5 percent to 14.34 euros, the biggest gain since May, as Commerzbank upgraded the maker of fragrances and cosmetic ingredients to “add” from “hold.”

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

Last Updated: November 6, 2009 12:22 EST