Siemens and Electrolux paced advances by companies dependent on economic growth in Europe's biggest trading partner.

J Sainsbury jumped 14 percent after buyout firms said they were considering an offer for the U.K. supermarket chain.

Hochtief climbed to the highest since at least 14 years after a magazine reported the German builder may receive bids for its units.

The Dow Jones Stoxx 600 Index gained the most in seven weeks, adding 1.8% to 378.97 in five days. The Stoxx 50 rose 1.6%, while the Euro Stoxx 50, a measure for the 12 countries using the euro, increased 1.9%.

The Stoxx 600 has rebounded 26% from last year's low on 13 June amid a record wave of takeovers and a pause in a two-year run of interest-rate increases. Reports on the US economy and employment this week signaled accelerating growth and easing price pressures, boosting prospects for companies' earnings.

The Fed on 31 January left its benchmark lending rate unchanged at 5.25%.

Policy makers have kept borrowing costs on hold since August.

Siemens, Europe's largest engineering company, gained 4.1% in the week. Electrolux, the world's second-largest maker of household appliances, rose 2.7%. Bayer, Germany's biggest drugmaker, added 5.4%.

The US accounted for a fifth of sales last year for Siemens. Electrolux generated almost half of its revenue from North America in 2005, and 27% of Bayer's sales came from the region.

The US economy, the world's largest, grew a more-than-expected 3.5% in the fourth quarter, up from 2% in the previous three months. The following day the Commerce Department said the Fed's preferred measure of inflation rose less than forecast in December, while a report the next day showed wage growth slowed in January as the unemployment rate rose to 4.6%, lessening the risk that inflation will flare up.On Friday, the Stoxx 600 increased 0.5%. The Stoxx 50 rose 0.4% as did the Euro Stoxx 50.

National benchmarks rose in all 18 western European markets in the week. Germany's DAX gained 2.9%, France's CAC 40 added 1.7%, and the FTSE 100 climbed 1.3%.

Sainsbury surged after Blackstone Group, Kohlberg Kravis Roberts & Co and CVC Capital Partners said they were in "preliminary stages" and may not bid for the UK's third-largest supermarket company.

(Bloomberg)