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European stocks gained for a second day, rallying from earlier losses, as U.S. consumer confidence rose to a four-year high in May and talks continued on forming a Greek government.
In the U.S., consumer confidence rose in May to the highest level in four years, indicating falling fuel costs are helping households look past weaker employment growth.
In Greece, Evangelos Venizelos, the socialist Pasok leader, will press counterparts on a proposal for a unity government that would avert a new election.
Stocks earlier fell after Spain said it will force the country’s banks to increase provisions against losses on real estate loans by 30 billion euros ($38 billion) and will hire two auditors to gauge all the assets of lenders in the government’s fourth attempt to clean up the financial system.
A gauge of European banks was the second-worst performer of the 19 industry groups in the Stoxx 600, with Barclays Plc dropping 2.9 percent to 202.8 pence.
Credit Agricole SA, France’s third-largest bank by market value, lost 1 percent to 3.46 euros after it said first-quarter profit fell to 252 million euros from 1 billion euros a year earlier, hurt by Greek losses.
Telefonica SA, Spain’s largest phone company, declined 1.3 percent to 11.17 euros. First-quarter operating income before depreciation and amortization was 5.08 billion euros, falling short of the 5.23 billion-euro analyst estimate. Revenue in the first quarter was 15.51 billion euros, more than the average analyst estimate of 15.43 billion euros. The company reiterated its full-year targets.
A gauge of European carmakers was the best performing group in the Stoxx 600. Renault SA and Pirelli & C SpA jumped 5 percent to 33.19 euros, and 4.3 percent to 8.90 euros, respectively. Nissan Motor Co., Japan’s second-biggest automaker, forecast profit will rise to the highest in five years, helped by rising demand for its vehicles in the U.S. and China.
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