"The best companies are coming out ahead, " said Romain Boscher, a fund manager at Groupama Asset Management in Paris, which oversees about $19bn in stocks.

"That's reassuring. We've won one more reporting period."

The Dow Jones Stoxx 600 Index rose 0.6% to 327.32 in London. It gained 4.1% in the past "ve days, the biggest weekly advance since November. The Stoxx 50 and the Euro Stoxx 50, a measure for the countries in the eurozone, both added 0.8% on Friday.

Volkswagen AG, the region's biggest car maker, and Royal Dutch Shell, Europe's second-largest oil company, were among others reporting earnings that topped estimates last week.

Analysts expect second-quarter profit for Stoxx 600 companies to rise 12% on average this year, more than triple the 3.8% predicted last week, according to estimates compiled by FactSet Research Systems.

US slowdown Stocks extended gains after a report today showed US economic growth slowed more than economists had expected in the second quarter, easing concerns that the Federal Reserve will need to lift interest rates.

"Weaker economic data is a positive sign, " said Frank Schallenberger, an equity strategist at Landesbank BadenWuerttemberg in Stuttgart.

"This will compensate for fears of an economic slump."

Prudential, Britain's secondbiggest insurer, slid after it reported "rst-half operating pro"t that fell short of analysts' estimates.

Of the 19 Dow Jones Stoxx 50 companies that have reported earnings or sales so far this quarter, 14 were above estimates, or 74%.

That's better than the 60% reported in the same quarter last year.

Seasonal gains "The earnings season's going very well, '" said Karsten Stroh, the managing director of JPMorgan Asset Management's German business, which oversees $20bn.

"We've had even more positive surprises than in previous years."

Benchmarks gained today in 15 of the 18 western European markets.

The FTSE 100 gained 0.8% and Spain's IBEX 35 rose 1%, while Germany's DAX climbed 0.8%.

Renault, the French car maker headed by Carlos Ghosn, gained as much as 5% on the week. First-half net income tumbled 25% to 1.63bn ($2.08bn), still topping the median estimate of 1.28bn from 12 analysts surveyed by Bloomberg News. The shares closed 1.7% higher at 86.2.

Difficult Market "The company is showing that its industrial model can hold up in a dif"cult market, " said Samir Essafri, who helps manage about $5 bn in assets at Richelieu Finance in Paris.

"It's showing its capacity to make margins progress."

Bloomberg