"Mergers and acquisitions might keep the equity markets going for a while as there are a number of industries where a consolidation is imminent, " said Stephan Thomas, who manages the equivalent of $2.9 billion at Frankfurt Trust Investment.

"Investors are focusing on growth again."

ABN Amro gained on speculation Bank of America might be interested in buying the largest Dutch lender. BHP Billiton, Rio Tinto and BP led basic resources companies lower on concern commodity prices will slump.

The Dow Jones Stoxx 600 Index rose 1.4% to 335.68 in the past "ve days. The Stoxx 50 climbed 0.9 %, while the Euro Stoxx 50, a measure for the 12 nations using the euro, added 1.7%.

DaimlerChrysler slid after the world's "fth-largest carmaker cut its full-year pro"t target because of a loss at Chrysler in the third quarter. Speculation that earnings growth will be able to weather rising borrowing costs has sent the Stoxx 600 up 11% from its 2006 low, reached on 13 June. About three quarters of the 48 Stoxx 50 companies that have reported their latest earnings, have beaten estimates.

National benchmarks advanced in 16 of the 18 western European markets this week.

Germany's DAX added 2.5%, France's CAC 40 rose 1.4 % and the UK's FTSE 100 was little changed.

ABN Amro gained 4.6 % to 22.5 on speculation Bank of America might be interested in buying the Dutch bank. "The stock is vulnerable to any consolidation rumors and one of the most mentioned shares in that respect, " said Albert Ploegh.

An Amsterdam-based analyst at Kepler Equities, Ploegh has a "buy"' recommendation on the shares.

ABN Amro Chief Executive Of"cer Rijkman Groenink said in May he would consider selling the bank should a potential buyer offer 40 % more than the current share price. ABN Amro spokesman Neil Moorhouse and Bank of America spokesman Robert Ingram in London declined to comment on market speculation.

Business Objects, the world's largest maker of software to track corporate databases, rose 8.6 % to 24 on speculation the French company may be taken over. The $2.5 billion market for businessintelligence software will grow to $3 billion in 2009, according to researcher Gartner. Both Microsoft and Oracle have said they may expand in the area.

Commodity stocks were the worst performers on the Stoxx 600 this week on concern a global economic slowdown will damp demand for oil and metals. BHP, the world's biggest mining company, slipped 7.3 % to 910 pence. Rio Tinto, the third largest, fell 9 % to 2432 pence. BP, the world's third-biggest oil company by market value, declined 3.1 % to 573 pence.