July 29 (Bloomberg) -- European stocks rose, paced by Volkswagen AG, Business Objects SA and Cie. de Saint-Gobain SA after all three companies reported quarterly results that topped analysts' estimates.

Commodity producers including BHP Billiton and BP Plc advanced as copper and oil prices increased.

The Dow Jones Stoxx 600 Index is set to close at a three- year high for a fifth straight day. Of 70 European companies that reported their latest earnings, 50 percent beat estimates by more than 7.5 percent, according to Lehman Brothers Holdings Inc.

``We have been positive on European stocks for some time and feel vindicated by the recent performance,'' said Brian Tora, who oversees about $22 billion as chief investment officer at Gerrard Ltd. in London. ``We still feel comfortable, basically on the grounds of valuations and earnings.''

The Stoxx 600 added 0.4 percent to 286.20 at 11:05 a.m. in London, with 14 of 18 industry groups rising. The Stoxx 50 also advanced 0.4 percent, and the Euro Stoxx 50, a benchmark for the 12 countries using the euro, increased 0.3 percent.

The average price-to-earnings ratio for companies on the Stoxx 50 this year is 15.46, compared with 20.09 for the same period a year ago, according to Bloomberg data.

Twelve companies in the Stoxx 600 are reporting earnings today, according to Bloomberg data.

A U.S. government report today may show the world's largest economy grew at a 3.5 percent annual pace from April through June, the ninth straight quarter in excess of 3 percent, as consumers didn't let record gasoline prices stop them from buying more cars and clothes, according to the median estimate of 66 economists in a Bloomberg News survey.

The Commerce Department is scheduled to release the report at 8:30 a.m. Washington time.

Weekly Advance

Benchmark indexes rose in all 17 Western European markets that were open, except for Portugal and Switzerland. France's CAC 40 added 0.5 percent, Germany's DAX climbed 0.4 percent and the U.K.'s FTSE 100 increased 0.6 percent. Austria's ATX rose the most with a 0.9 percent gain, paced by Erste Bank AG.

The Stoxx 600 is heading for a 1.6 percent gain this week, which would be its 11th consecutive weekly increase. The last time that happened was a streak ending in the last week of 1999.

``Investors started getting into the market with caution, gradually, and it ended up in this nice rally,'' said Mike Bayer, a fund manager at Ceros Vermoegensverwaltung, which runs $340 million in Frankfurt. ``There's a big possibility that the trend goes on in the second half. Earnings have helped.''

He declined to name favorite stocks but said he ``would stay diversified.''

Companies on the Stoxx 600 will probably report an average earnings increase of 15.7 percent this year, according to estimates this week from FactSet JCF, a surveyor of analysts.

Volkswagen, Business Objects

In the U.S., the Nasdaq Composite Index and the Standard & Poor's 500 Index reached four-year highs yesterday as companies including Starbucks Corp. raised their annual profit forecasts.

Volkswagen rose 1.4 percent to 40.06 euros. Europe's largest carmaker said operating profit in the second quarter rose 75 percent to 911 million euros, beating the 676 million-euro estimate in a Bloomberg survey of analysts.

Second-quarter revenue rose 5.9 percent to 24.9 billion euros, surpassing the analysts' 24.4 billion-euro median estimate. Profit fell 6.8 percent because of price cuts in Europe and slack sales in China and the U.S.

Business Objects soared 10 percent to 25.75 euros in Paris. The world's largest maker of computer programs to track corporate databases said second-quarter profit doubled as new customers snapped up the latest version of its software.

Excluding some costs, the company reported profit of 32 cents a share, topping the 27 cents expected by 33 analysts in a Thomson Financial survey.

Saint-Gobain, BHP

Saint-Gobain gained 1.3 percent to 49.76 euros. Europe's biggest supplier of building materials said after markets closed yesterday that first-half profit rose 14 percent to 632 million euros, helped by record levels of construction in the U.S. Analysts had expected 598 million euros, according to the median of six estimates in a Bloomberg survey.

BHP Billiton, the world's biggest miner, gained 1.5 percent to 802 pence. Rio Tinto Plc, the world's third-largest miner, increased 0.6 percent to 1894 pence.

JPMorgan Chase & Co. raised its profit estimates for BHP for 2006, 2007 and 2008, according to a report dated yesterday. JPMorgan said thermal coal may stay at a record $54 a metric ton in 2006, compared with previous estimates of a drop to $50.

Copper prices rose to a record on the London Metal Exchange. Copper for delivery in three months rose as much as $21, or 0.6 percent, to $3,546 a metric ton.

BP, AstraZeneca, Erste Bank

BP, the second-largest publicly traded oil company, added 0.7 percent to 635 pence. Total SA, Europe's biggest oil refiner, climbed 1.2 percent to 208.3 euros. Crude for September delivery rose 0.6 percent to $60.29 a barrel in New York.

AztraZeneca Plc climbed 4.1 percent to 2581 pence, extending yesterday's 5.6 percent increase. The shares were raised to ``neutral'' from ``underperform'' at Exane BNP Paribas. The U.K.'s second-largest drugmaker yesterday raised its forecast for full-year earnings and announced plans to replace its chief executive.

Erste Bank jumped 3.4 percent to 42.40 euros. Shares of Austria's second-biggest bank were raised to ``buy'' from ``neutral'' at UBS AG.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

Last Updated: July 29, 2005 06:12 EDT