European Stocks Rise

European stock markets rose on renewed hopes for a Greek bailout, although gains were tempered by weaker-than-expected economic data out of the U.S.

The Stoxx Europe 600 index rose 0.7%, to 266.21, trading near levels not seen since last summer. Among the biggest gainers in the index Friday, Aker Solutions surged 18% after reporting a 20% rise in profit, driven by upbeat activity in the oil and gas sector.

Banks led the gains in Europe after it appeared European officials were moving closer to an agreement to close Greece's funding gap, which could clear the way for approval of a second bailout.

German Chancellor Angela Merkel, Italian Prime Minister Mario Monti and Greek Prime Minister Lucas Papademos expressed confidence in a conference call Friday that euro-zone finance ministers would reach an agreement on outstanding issues when they meet Monday, a spokesman for Ms. Merkel said.

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The positive sentiment also was aided by U.S. economic data on Thursday, suggesting that the world's largest economy is improving. Separately, data released Friday showed underlying U.S. consumer prices accelerated by the fastest pace in four months in January. However, stock markets pared gains in afternoon trading as the Conference Board in the U.S. said its index of leading economic indicators rose less than expected in January.

The Dow Jones Industrial Average was up 0.2%, to 12933.30, in early Friday afternoon trading. In Asia, stocks moved higher, with Hong Kong's Hang Seng Index gaining 1% and Japan's Nikkei Stock Average advancing 1.6%.

The Athens General Index rallied 5%, to 824.26, with National Bank of Greece jumping 10% and Piraeus Bank gaining 14%.

"It's relief that we may get an agreement on Greece at last, but it doesn't solve the issue of how to run the euro zone," said Justin Urquhart Stewart, co-founder of Seven Investment Management. "But markets should be looking at forward valuation in companies and not political issues. The global growth is there and companies are in good shape."

Spanish banks added to the positive sentiment, with Banco Santander up 2.4% and Banco Bilbao Vizcaya Argentaria 1.6% higher. Spain's Ibex 35 index gained 1.4%, to 8681.10, and yields on 10-year government bonds pulled back to 5.22%.

French banks Société Générale and Crédit Agricole added 6% and 4.6%, respectively, helping lift the CAC-40 index 1.5%, to 3443.50.

Also supporting the French index, Lafarge rose 7.7%. The cement maker swung to a surprise fourth-quarter net loss, as it reported a 5% sales gain. But the company announced plans for further cost costs, divestments of more than €1 billion, and said it would cut its dividend to 50 cents a share.

Following Lafarge's move, HeidelbergCement added 6%, posting the biggest gain in the German DAX index, which gained 1.5%, to 6852.

Autos were up across Europe, with Renault gaining 4.9% and PSA Peugeot-Citroën advancing 3.9%.

In Frankfurt, Volkswagen rose 2.1%. The German car maker reported a 1.3% increase in global sales in January compared with last year, but said 2012 could be challenging. Daimler gained 3% and BMW rose 2.1%.

The U.K. FTSE 100 index rose 0.5%, to 5916.86. The index got a brief boost after the government reported a jump in January retail sales.

Resource stocks underpinned the index. Anglo American gained 1.4% after reporting a 6% drop in profit, but said its longer-term outlook remains strong. Randgold Resources rose 1.9%, Xstrata added 2%, while Vedanta Resources gained 5%.

Among other notable gainers, Oriflame Cosmetics jumped 13%, after the Swedish firm reported sales that beat analyst expectations and raised its dividend for 2011.

Finmeccanica rallied 14%. The Italian aerospace and defense company said Thursday that it had won an order from Israel's Ministry of Defense to provide M-346 planes for training purposes.