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European Stocks Rise to September 2008 High; SolarWorld, Adidas Increase

European stocks climbed to their highest level since September 2008 as investors speculated that the recovery in the global economy is strengthening.

SolarWorld AG rallied 6.7 percent as full-year earnings before interest and taxes climbed 26 percent. Adidas AG gained 3.6 percent after the sporting-goods maker’s chief executive officer said the company will generate 1 billion euros ($1.36 billion) of sales in China this year. Umeco Plc soared 4.9 percent as the maker of materials for McLaren racing cars said it has held talks about selling its Pattonair Ltd. unit.

The Stoxx Europe 600 Index advanced 1 percent to 288.74 at the 4:30 p.m. close in London, rising for a fifth day, its longest winning streak in eight weeks. The gauge has surged 24 percent since its 12-month low in May 2010 amid optimism that the U.S. economy is accelerating and as European governments introduced policies to support indebted countries using the single currency.

“The recovery is broadening,” said Mislav Matejka, head of pan-European equity strategy at JPMorgan Chase & Co. in London. “Risk-reward is still compelling. Earnings are still a tailwind.”

National benchmark indexes climbed in all of the 18 western European markets today, except Greece and Iceland. Germany’s DAX Index and the U.K.’s FTSE 100 Index rallied 0.9 percent, while France’s CAC 40 Index advanced 1.1 percent.

Stocks rose in Europe last week, snapping two weeks of losses, as reports showed manufacturing in the U.S., China and Europe expanded and the unemployment rate in the U.S. unexpectedly declined in January.

European Earnings

More than 73 percent of the 294 companies in the Standard & Poor’s 500 Index that have reported results since Jan. 10 topped earnings-per-share projections, according to Bloomberg data. In Europe, 56 percent beat forecasts, the data show. Companies from Credit Suisse Group AG to ArcelorMittal are scheduled to report results this week.

Stocks rallied even after German factory orders fell more than predicted in December after jumping five times more than economists had forecast in the previous month. Orders, adjusted for seasonal swings and inflation, dropped 3.4 percent from November, when they surged 5.2 percent, the Economy Ministry in Berlin said today.

In Egypt, Vice President Omar Suleiman promised -- within a month -- to draft a list of constitutional changes needed for free elections. Protesters remained on the streets of central Cairo demanding that President Hosni Mubarak step down before his term ends in September. Last week’s attacks by men identified as pro-Mubarak “thugs” by opposition campaigner Mohamed ElBaradei did not continue over the weekend.

SolarWorld, Adidas Gain

SolarWorld surged 6.7 percent to 8.34 euros as the German solar-cell manufacturer said full-year earnings before interest and taxes increased to 193 million euros from 153 million euros. The company also said it will propose increasing the dividend to 19 euro cents a share from 16 cents in May.

Adidas jumped 3.6 percent to 47.69 euros. Chief Executive Officer Herbert Hainer said the German sporting-goods maker will grow significantly this year after a strong 2010, DAF Deutsches Anleger Fernsehen reported, citing an interview. Adidas’s sales in China will exceed 1 billion euros this year, Hainer said.

Julius Baer Group Ltd. climbed 1.3 percent to 44.11 Swiss francs after the 121 year-old Swiss wealth manager said it plans to buy back as much as 500 million francs ($522 million) of stock, or as much as 5 percent of its outstanding shares, by its annual shareholder meeting next year.

The company’s full-year net income fell to 353 million francs from 389 million francs a year earlier as clients reassessed the benefits of their cross-border accounts.

Umeco jumped 4.9 percent to 483 pence after saying it is in “non-exclusive discussions” that may lead to the sale of its Pattonair supply-chain unit.

Xstrata, Randgold Resources

Xstrata Plc rallied 3.6 percent to 1,467.5 pence, leading a gauge of basic-resources stocks to the biggest gain among 19 industry groups in the Stoxx 600. Citigroup Inc. raised its price estimate on Xstrata shares 26 percent to 2,011 pence.

Copper rose to records in London and New York after figures signaled the U.S. economic recovery is continuing and as investors speculated that Chinese buying will resume after a weeklong holiday.

Randgold Resources Ltd. climbed 2.6 percent to 5,110 pence as the company proposed to increase its dividend by 18 percent. The producer of gold in West Africa also said 2010 profit rose 49 percent on higher prices and forecast a production gain of as much as 80 percent this year, even as the political crisis in Ivory Coast curbed output last quarter.

Net income rose to $103.5 million from $69.4 million a year earlier, the Jersey, Channel Islands-based company said today in a statement. Sales climbed 12 percent to $487.7 million.

Air Berlin Plc advanced 3.8 percent to 3.58 euros. The airline’s passenger traffic increased 5.7 percent to 2.15 million in January, the airline said today. The January load factor rose to 72 percent from 69 percent, the Berlin-based company said.

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

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.

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