May 25 (Bloomberg) -- European stocks swung between gains and losses before a government report on U.S. growth that may shed light on the prospects for further interest-rate increases.

Rio Tinto Group and BHP Billiton led mining companies higher as Lehman Brothers Holdings Inc. said investors should buy the stocks. BP Plc and Total SA paced declines in energy producers after crude-oil prices fell.

The Dow Jones Stoxx 600 Index added 0.1 percent to 313.38 as of 10:55 a.m. in London, after earlier dropping as much as 0.4 percent. The Stoxx 50 also gained 0.1 percent as did the Euro Stoxx 50 index for the 12 countries using the euro.

The Stoxx 600 has pared almost all of its 2006 gain this month on concern that central banks in the U.S. and Europe will keep raising interest rates, curbing economic growth. The benchmark is up 0.9 percent in 2006, after rising as much as 11 percent through May 9.

``In the last 10 days or so people lost a lot of money and everyone is still quite afraid,'' said Niccolo Pini, who helps manage about $700 million at Banca Ifigest SpA in Florence. His company has been selling equities and buying derivatives products linked to stocks in recent sessions, he said. ``We have to be careful that rates don't rise'' more than expected.

The U.S. economy probably grew at an annual pace of 5.8 percent in the first quarter, faster than the government initially estimated, a survey of 72 economists by Bloomberg News showed. A report is due for 1:30 p.m. London time.

A separate report may show the sales pace of previously owned homes fell in April.

Business Confidence

Italian business confidence unexpectedly rose in May to the highest in more than five years, a separate report showed today, on expectations that growth and demand will weather near-record oil prices and an appreciating euro.

The U.S. Federal Reserve has lifted rates 16 times since June 2004. European Central Bank President Jean-Claude Trichet signaled this month the ECB will raise rates as soon as June and said the bank will exercise ``strong vigilance'' on inflation.

Interest-rate futures show traders are factoring in a 56 percent chance the Fed will take its target rate to 5.25 percent at its June meeting, compared with 20 percent at the start of the month.

Investors expect ECB policy makers to lift the rate 25 basis points to 2.75 percent on June 8 and to increase borrowing costs to 3.25 percent by year-end, interest-rate futures show.

National Markets

Indexes rose in seven of the 10 western European markets that were open today. Germany's DAX Index gained 0.6 percent, and the U.K.'s FTSE 100 Index added 0.2 percent. France's CAC 40 Index was little changed.

Exchanges in Austria, Denmark, Iceland, Finland, Luxembourg, Norway, Sweden and Switzerland are closed for public holidays.

Rio Tinto, the world's third-biggest mining company, added 2.4 percent to 2,903 pence. BHP Billiton, the largest one, rose 1 percent to 1,014.5. Anglo American Plc, the second-largest, gained 1.2 percent to 2,041 pence.

The three stocks paced the decline in the Stoxx 600 Basic Resources Index in the past month, dragging the measure to the worst performance among 18 groups in the broader Stoxx 600.

``Strong fundamentals, conservative commodity price forecasts, and compelling valuations should support share prices at levels well above where Rio Tinto, BHP and Anglo American trade today,'' wrote Christopher LaFemina, an analyst at Lehman Brothers in a note to investors today.

Copper for delivery in three months on the LME advanced as much as $150 to $7,980 a metric ton. Copper reached a record $8,800 on May 11.

Crude Falls

Crude oil for July delivery sank 2.7 percent yesterday to close at $69.86 a barrel. The contracts were at $70.06 a barrel in after-hours electronic trading on the New York Mercantile Exchange today.

BP, Europe's largest oil company, retreated 1.5 percent to 611 pence. Total, the No.3, lost 2 percent to 48.78 euros.

Groupe Danone, the bottler of Evian water, added 2.6 percent to 94.1 euros. Merrill Lynch & Co. added the shares of the French company to its ``Europe 1'' list of favorite stocks. In a note to investors, the brokerage said that investors buying Danone shares are getting ``quality at a low risk.''

London Stock Exchange Plc, under pressure to agree to a takeover by Nasdaq Stock Market Inc., fell 5.8 percent to 1,120 pence after saying full-year profit rose 8.8 percent, below analysts' estimates. Chief Executive Officer Clara Furse said today the company doesn't ``need to do a deal.''

ProSiebenSat.1 Media AG, the broadcaster that publisher Axel Springer AG failed to buy earlier this year, rose 3.1 percent to 20 euros. Deutsche Bank AG raised its recommendation on the stock to ``buy'' from ``hold.''

Analyst Kai Korschelt wrote the stock's 17 percent drop since May 8 is ``unwarranted,'' as the World Cup soccer tournament and consumer spending ahead of a sales tax increase next year will help advertising revenue this year.

Barclays Plc lost 0.9 percent to 589 pence. Britain's third-largest bank said expenses and charges for bad loans in its consumer unit will grow as fast as income this year.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net

Last Updated: May 25, 2006 06:04 EDT