European Stocks Cap Longest Stretch of Monthly Gains Since 2007

May 30 (Bloomberg) -- European stocks rose for a second week, with the Dow Jones Stoxx 600 Index capping its longest stretch of monthly gains since May 2007, as investors speculated the worst of the global recession is over.

Anglo American Plc and Total SA led commodity producers higher after base metals and crude oil increased. Tesco Plc paced an advance among retailers as investors sought shares of companies whose profits are more closely tied to economic growth. United Internet AG rallied 27 percent after agreeing to buy Freenet AG’s digital subscriber-line business.

The Dow Jones Stoxx 600 Index rose 0.6 percent this week to 208.21. The measure added 4 percent in May, gaining for a third straight month and bringing the rally since March 9 to 32 percent amid optimism the $12.8 trillion pledged by the U.S. government and the Federal Reserve will help to end the first global recession since World War II.

“People are on the lookout for bright spots and every time one appears it serves as a relief,” said Peter Braendle, who oversees about $50 billion at Swisscanto Asset Management in Zurich. “The economic data is no longer as alarming as it used to be. If we see an economic upturn, raw-material producers will continue to be in demand.”

A report on May 29 showed the U.S. economy contracted at a 5.7 percent annual pace in the first quarter, less than the government estimated last month. Sales of existing homes in the U.S. gained in April, the National Association of Realtors said earlier this week.

National Indexes

Other reports showed Japan’s industrial output increased the most since 1953 in April, India’s economy grew more than analysts estimated last quarter, and Poland expanded in the first quarter.

National benchmark indexes rose in 11 of the 18 western European markets. The U.K.’s FTSE 100 climbed 1.2 percent, led by a rally in mining shares. France’s CAC 40 added 1.5 percent and Germany’s DAX advanced 0.5 percent.

Basic-resource stocks posted the steepest gain among 19 industry groups in the Stoxx 600, increasing 4.9 percent.

Anglo American, the world’s fourth-biggest diversified mining company, soared 9.4 percent. Xstrata Plc, the fourth- largest copper producer, added 4.4 percent. Copper advanced for a fifth consecutive month on the London Metal Exchange. LME- monitored stockpiles of copper have fallen 43 percent from a peak at the end of February as China, the world’s largest consumer, bought metal.

‘Vector of Support’

“There is optimism from signs that activity in Asia is taking off,” said Emmanuel Soupre, who helps manage about $18 billion at Neuflize OBC in Paris. “This is welcome and shows that China remains a vector of support. This explains the rebound in raw materials.”

Oil climbed 30 percent in May, the biggest monthly increase since March 1999. Yesterday’s settlement at $66.31 was the highest since Nov. 4 and came after OPEC kept output unchanged.

Total, Europe’s third-largest oil company, rose 2.7 percent. Royal Dutch Shell Plc, the biggest, advanced 1.8 percent. Cairn Energy Ltd., the U.K. explorer operating on six continents, increased 3.9 percent.

Seadrill Ltd. added 8.8 percent after the Norwegian oil-rig company controlled by billionaire John Fredriksen said first- quarter net income was $243.2 million, beating the $148 million average estimate of 10 analysts surveyed by Bloomberg News.

Consumer Confidence

A measure of retailers in the Stoxx 600 rose 1.8 percent. Tesco, the U.K.’s biggest retailer, climbed 4 percent. Metro AG, Germany’s largest, rallied 4.7 percent.

U.K. consumer confidence matched the highest level in almost a year this month as people became more optimistic that they can weather the recession, according to a report on May 29. Conference Board figures earlier this week showed confidence among U.S. consumers in May surged the most in six years.

United Internet, Germany’s third-largest Web-access provider, jumped 27 percent after agreeing to buy Freenet’s digital subscriber-line business for 123 million euros ($174 million) in cash and shares, adding about 700,000 customers.

ITV Plc, the U.K.’s biggest commercial broadcaster, soared 35 percent. Goldman Sachs Group Inc. added the stock to its “conviction buy” list, saying the company is well positioned to benefit from a recovery in the advertising industry. Bank of America Corp. also recommended investors buy the shares.

Wolseley Plc sank 15 percent after the world’s largest supplier of heating and plumbing gear said slumping demand caused pretax profit to fall 80 percent in the nine months through April and warned markets won’t recover this year.

Worst Performers

Construction and material stocks dropped 2.7 percent as a group, the worst performance in the Stoxx 600. Royal BAM Groep NV sank 10 percent after the Dutch builder reported first- quarter earnings that missed analysts’ estimates, caused by a loss at the company’s property division.

Genmab A/S tumbled 19 percent as U.S. regulators said it’s difficult to tell whether the Danish biotechnology company’s experimental Arzerra drug will yield significant health benefits for leukemia patients.