Sept. 14 (Bloomberg) -- European stocks advanced. UBS AG and Credit Suisse Group led gains among banks after Lehman Brothers Holdings Inc. in the U.S reported earnings that beat expectations. JCDecaux SA also gained on better-than-expected first-half profit.

``By and large earnings seem pretty good,'' said Michael Joynson, a fund manager at Invesco Asset Management in Henley-on- Thames, England, which manages about $6 billion. ``Clearly its varying from sector to sector so it's not a one size fits all, but general trends remain fine.''

Automakers including Volkswagen AG and Renault SA climbed after an industry report showed new car sales rose in Europe in August, boosted by revamped models.

The Dow Jones Stoxx 600 Index climbed for a third day in four, adding 0.3 percent to 292.05 as of 4:48 p.m. in London. All the measure's 18 industry groups advanced except for the Construction & Materials Index. The Stoxx 50 and the Euro Stoxx 50, a benchmark for the 12 nations sharing the euro, climbed 0.4 percent.

Benchmarks rose in all 18 Western European markets except Denmark, Ireland and Iceland. France's CAC 40 gained 0.4 percent. The U.K.'s FTSE 100 and Germany's DAX Index advanced 0.2 percent.

UBS, Credit Suisse, which operate investment banks, rose as Lehman Brothers, the No. 4 securities firm by market value, reported profit that topped analysts' estimates. Equity underwriting and trading boosted earnings.

UBS, Europe's biggest bank by assets, added 0.8 percent to 107.5 Swiss francs. Credit Suisse, the No. 2 Swiss bank, rose 1.2 percent to 56.95 francs.

JCDecaux, Volkswagen

JCDecaux added 6.1 percent to 19.70 euros, the biggest gain in 18 months and the steepest advance on the Stoxx 600. The world's second-largest outdoor advertising company said first- half net income rose 20 percent to 83.3 million euros, boosted by an acquisition in Hong Kong.

``Development in Asia is gaining magnitude and should pull the company's growth,'' said Jean-Sebastien Beslay, a fund manager with Trusteam Finance in Paris, which manages $131 million in assets.

Car sales in Europe last month increased 7.5 percent from a year earlier, the Brussels-based European Automobile Manufacturers Association said in an e-mailed statement.

Volkswagen, Europe's largest carmaker, added 1 percent to 44.58 euros. The company increased sales 20 percent to 199,839 units in August.

Renault, France's second-biggest car company, added 0.9 percent to 73.10 euros. European sales by Nissan Motor Co., Japan's second-largest automaker, which is 44 percent owned by Renault, rose 9.9 percent to 23,396 vehicles.

Old Cars

``The average age of German cars is about seven and a half years,'' said Andreas Gartner, a fund manager at SEB Investment- Fonds GmbH in Frankfurt, who oversees about $1.2 billion in assets, including Bayerische Motoren Werke AG and Volkswagen shares. ``At some point you have to invest and buy a new one.''

The Stoxx 600 Automobiles & Parts Index has been the third- worst performer among the 18 groups over the last month, falling 0.2 percent. The Stoxx 600 as a whole has risen 1.4 percent in the period.

Nokia Oyj, the largest mobile-phone maker, gained 0.6 percent to 13.63 euros as JPMorgan Chase & Co. lifted its recommendation on the shares to ``neutral'' from ``underperform,'' citing yesterday's increased sales and profit forecasts. The company yesterday raised forecasts for this quarter as phones with high-resolution cameras and music players lured buyers.

Bouygues SA fell 1.7 percent to 36.06 euros as its earnings missed estimates. The world's No. 3 construction company said second-quarter profit rose 38 percent from a year earlier to 288 million euros, lagging behind the 310 million-euro median estimate of six analysts surveyed by Bloomberg.

Investment Banking

Allianz AG, which is buying out minority shareholders in Italian insurer Riunione Adriatica di Sicurta SpA, advanced 1.1 percent to 104.62 euros. Citigroup Inc. raised Allianz shares to ``buy'' from ``hold.''

The German insurer may also purchase the rest of its French unit, Assurances Generales de France SA, AGF Chief Executive Jean- Philippe Thierry told Germany's Handelsblatt.

Assurances Generales shares added 1 percent to 73.20 euros, the highest in almost five years. Allianz two days ago said investors betting on a bid for AGF may be ``disappointed.''

Vivendi Universal SA, the owner of France's No. 2 mobile- phone company gained 1.4 percent to 26.28 euros. The company had its debt rating raised one level to Baa2 from Baa3 by Moody's Investors Service.

Merck, Seat Pagine

Merck KgaA dropped 3.4 percent to 67.65 euros, the second- biggest decliner in the Stoxx 600, after Morgan Stanley cut the world's No. 3 maker of generic drugs to ``underweight'' from ``overweight.''

Seat Pagine Gialle SpA, Italy's largest phone-directory publisher, rose 4.8 percent to 38.8 cents. Credit Suisse First Boston raised the stock to ``outperform'' from ``neutral'' and lifted its profit estimates, saying first-half results released last week were in line with its expectations.

Thales SA, Europe's largest defense-electronics maker, rose 1.1 percent to 36.94 euros. Noel Forgeard, co-chief executive of European Aeronautic, Defence & Space Co., told Le Figaro he's looking at opportunities for defense acquisitions, adding that a purchase of Thales is ``a matter of reflection, discussion and meetings like others in Europe.''

Fabege, provident Financial

Fabege AB, a Swedish real-estate investor, added 7.8 percent to 138 kronor. The company said it has started its share buyback program, which was approved in May. The shares have lost 18 percent since the company reported second-quarter earnings August 10.

Provident Financial Plc, a U.K. lender to low-income households, gained 4.5 percent to 667 pence after saying it may sell its Yes Car Credit financing unit. The business led to a drop in first-half profit as Britons bought fewer used cars in the half year and shopped around more for the cheapest loans.

Tullow Oil Plc climbed 3.1 percent to 225.25 pence. The U.K.- based oil and natural-gas company said first-half profit climbed more than sevenfold, boosted by acquisitions in the North Sea as well as ``exceptionally strong'' energy prices. Brent crude oil prices climbed 37 percent in the first half.

To contact the reporter on this story: Chris Fournier in Frankfurt at Cfournier3@bloomberg.net

Last Updated: September 14, 2005 11:55 EDT