Marks & Spencer, the U.K.’s biggest clothing retailer, surged 12 percent as confidence among British consumers reached the highest level since May. Anglo American Plc rose 8.1 percent as copper headed for its best quarter in almost three years. National Australia Bank declined 3.3 percent after the country’s central bank said the economy is likely to enter a recession.

Europe’s Dow Jones Stoxx 600 Index added 2.3 percent to 174.43 at 1:33 p.m. in London, erasing its March decline. The gauge has advanced 10 percent since March 9, reducing its quarterly decline to 12 percent, as banks from Citigroup Inc. to JPMorgan Chase & Co. said they made money in the first two months of 2009 and U.S. Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic assets.

“We have seen quite lot of indications that have stopped deteriorating,” said Kevin Lilley, a London-based fund manager at Royal London Asset Management, which has $63 billion. “There is quite of lot of newsflow that is building a base for the market. Now it’s a case of what kind of recovery we can get.”

Stock indexes have rebounded after the MSCI World Index suffered its worst start to a year on record as governments pumped trillions of dollars into the financial system.

$12.8 Trillion

The U.S. government and the Federal Reserve committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year. The MSCI World gauge of 23 developed countries is down 14 percent for the quarter after losing 25 percent through March 9.

Futures on the Standard & Poor’s 500 Index added 1 percent today as Alcoa Inc. advanced, indicating the benchmark index for U.S. equities will extend its biggest monthly gain since 2003. The S&P 500 posted its biggest drop in three weeks yesterday as the Obama administration warned that some banks will need more government aid and General Motors Corp. and Chrysler LLC have one last chance to restructure.

The MSCI Asia Pacific Index lost 1.3 percent, extending yesterday’s 4 percent slump, as the Asian Development Bank cut economic growth forecasts. Japan’s Nikkei 225 Stock Average declined for a third day, led by Mizuho Financial Group Inc.

Marks & Spencer

Marks & Spencer climbed 12 percent to 295.75 pence. Revenue at U.K. stores open at least a year declined 4.2 percent in the fourth quarter. That beat the 6.8 percent drop estimated by 14 analysts surveyed by Bloomberg News, as new Portfolio women’s fashions and Wise Buy budget foods stemmed a revenue decline.

Separately, U.K. consumer confidence increased to the highest level since May after the Bank of England cut interest rates to a record low, GfK NOP said. The researcher’s index of consumer confidence rose five points to minus 30 in March.

Anglo American, the world’s fourth-largest diversified mining company, added 8.1 percent to 1,169 pence.

Copper for three-month delivery rose 3.1 percent to $4,030 per metric ton in London, rebounding from yesterday’s 3.5 percent drop. The metal has added 31 percent this year, poised for its best quarter since the three months through June 2006.

Alcoa climbed 6.9 percent to $7.15 after Southern Cross Equities Ltd. said BHP Billiton Ltd. could make a takeover bid for the largest U.S. aluminum producer.

“Alcoa fits in all the BHP boxes in my view,” Charlie Aitken, executive director at Southern Cross, wrote in a report. Alcoa’s assets “appear grossly cheap versus any replacement value or mid cycle earnings valuations,” he added.

Deutsche Boerse, ICAP

Deutsche Boerse AG, Europe’s biggest exchange, rose 6.3 percent to 44.12 euros after its two largest shareholders, hedge funds Children’s Investment Fund Management UK LLP and Atticus Capital LLC, terminated an agreement to act in concert.

The German bourse has previously fought over strategy with TCI and Atticus. The hedge funds last year demanded Deutsche Boerse Chairman Kurt Viermetz resign and also led the shareholders who in 2005 ousted the top management of Chairman Rolf Breuer and Chief Executive Officer Werner Seifert.

ICAP Plc advanced 8.7 percent to 296.75 pence. The world’s largest broker of transactions between banks said revenue for the year exceeded 1.5 billion pounds ($2.14 billion) for the first time.

Fiat SpA climbed 10 percent to 5.28 euros. Chrysler and Cerberus Capital Management LP have a “framework” of an alliance with Fiat, the U.S. automaker said. The revised accord calls for an initial Fiat stake of 20 percent, said a person familiar with the plans, who didn’t want to be identified because they aren’t yet public.

Porsche Drops

Porsche SE slid 4.6 percent to 35.32 euros even after the maker of the 911 sports car boosted first-half profit more than fourfold to 5.55 billion euros ($7.4 billion) on gains from an increased stake in Volkswagen AG. Net debt jumped to 9 billion euros at the end of January from 3.1 billion euros six months earlier.

Earnings at European companies may drop 55 percent from the peak before recovering “modestly” in 2010, according to Goldman Sachs Group Inc.

“This is significantly worse than the 25 percent peak-to- trough fall in the early 1990s and 46 percent in 2001-02,” strategists led by Peter Oppenheimer wrote in a report today. “The recovery we expect is lackluster compared with those previous periods, mainly reflecting slow volume growth and low price inflation.”

Profits will decline 38 percent this year and rise 19 percent in 2010, Goldman Sachs said.

Australia’s Economy

National Australia Bank, the nation’s biggest by assets, sank 3.3 percent to A$20.10. Stockland, the country’s biggest housing developer, tumbled 6.4 percent to A$3.09.

“There are limits on how much we can insulate ourselves from what is happening abroad, and therefore there are probably still some difficult times ahead,” Australia’s central bank Deputy Governor Ric Battellino said today. Gross domestic product is “likely to fall in 2009,” he said.

Economies in Asia excluding Japan will grow 3.4 percent this year, less than a 5.8 percent estimate in early December, the Asian Development Bank said in a report today. Japan’s statistics bureau said today the nation’s jobless rate rose to 4.4 percent last month, the highest level in three years.

Mizuho slumped 4.6 percent to 188 yen. Tokio Marine Holdings Inc., the nation’s biggest casualty insurer, dropped 5.9 percent to 2,395 yen.

Rally to End?

This month’s advance in global stocks will end because valuations still aren’t cheap enough to have marked a bottom and problems with mortgage-backed securities will weigh on the financial system, Deutsche Bank AG said.

The S&P 500, which surged 16 percent since March 9, is trading at 14 times earnings, based on 10 years of profits, according to data compiled by Yale University’s Robert Shiller.

The gauge needs to fall below 10 times to achieve a final bottom for a bear market, Brad Jones, a Hong Kong-based strategist at Deutsche Bank, wrote in a report dated yesterday. When the U.S. market crashed in 1929 there were eight rallies of 15 percent or more before the index reached a final nadir in 1932, according to Jones.

Wal-Mart Stores Inc., the world’s largest retailer, added 0.8 percent to $52.17. A Conference Board report scheduled for 10 a.m. Washington time may show U.S. consumer confidence increased this month to 28 from February’s record low as stock prices rebounded, according to a Bloomberg survey of economists.

 SOURCE: Bloomberg