European stocks close:

European stocks climbed, halting a four-day selloff, after European Central Bank President Mario Draghi said policy makers will do whatever it takes to preserve the euro.

The Stoxx Europe 600 Index (SXXP) jumped 2.1 percent to 255.61 at 2:22 p.m. in London as all but 58 companies advanced. The gauge had dropped 4.4 percent the previous four sessions as a surge in Spanish bond yields above 7 percent reignited concern that Europe’s debt crisis is yet to be contained.

Stocks surged after Draghi signaled central bank officials are prepared to do whatever is needed to ensure the euro’s survival and act on surging bond yields. His comments came as Spanish policy makers called on the central bank to fight a renewed bout of financial turmoil that pushed the country’s bond yields to euro-area records this week.

Spanish and Italian bonds advanced for a second day. Spain’s two-year yields fell the most this month after Draghi said addressing high yields on sovereign debt was within the central bank’s mandate. German bunds declined as his comments damped demand for the region’s safest assets.

National benchmark indexes rose in 16 of the 18 western- European markets today. The U.K.’s FTSE 100 gained 1.4 percent, France’s CAC 40 jumped 3.1 percent and Germany’s DAX climbed 1.8 percent. Spain’s IBEX 35 jumped 4.3 percent, while Italy’s FTSE MIB surged 4.9 percent.

FTSE 100 5,573.16 +74.84 +1.36% CAC 40 3,207.12 +125.38 +4.07% DAX 6,582.96 +176.44 +2.75%

Banco Bilbao Vizcaya Argentaria, Spain’s largest bank, climbed 7.1 percent to 4.75 euros. UniCredit (UCG), Italy’s biggest lender, surged 7.4 percent to 2.54 euros in Milan.

Unilever rose 6.2 percent to 2,272 pence, the highest since at least September 1988, after the world’s second-biggest consumer-goods maker announced a 5.8 percent gain in underlying revenue in the second quarter, boosted by the growth of personal-care products in Asia. The average analyst estimate surveyed by the company was for a 4.8 percent increase.

France Telecom climbed 4.6 percent to 10.74 euros after the country’s largest phone company reported a 3.2 percent decline in first-half revenue to 21.8 billion euros as price cuts helped slow customer defections. That compares with the 21.7 billion- euro average analyst estimate.

ABB Ltd. (ABBN) gained 4.7 percent to 16.53 Swiss francs after the maker of power-transmission equipment said it’s more confident about its short-term outlook as orders increased in China in recent months and it experienced “sustained order growth” in the U.S. Net income for the second quarter still fell 27 percent to $656 million, missing analyst estimates.

Telefonica SA (TEF) rallied 0.8 percent to 8.73 euros. The shares had tumbled as much as 8.7 percent after Europe’s biggest phone company suspended its 1.50 euro-a-share dividend for 2012 and reduced a revenue forecast.

Alcatel-Lucent (ALU) sank 4.8 percent to 83.3 euro cents after France’s largest network-equipment supplier said it will cut 5,000 jobs as part of a plan to save an additional 750 million euros. The company’s net loss, its first in five quarters, was 254 million euros compared with net income of 43 million euros a year earlier.

Volkswagen AG (VOW) retreated 1.7 percent to 131.35 euros as Europe’s biggest carmaker reported a 3.4 percent rise in second- quarter operating profit to 3.28 billion euros, slower than the first quarter’s 10 percent increase. Second-quarter sales gains also slowed to 19 percent from 26 percent.

Royal Dutch Shell Plc (RDSA) slid 3 percent to 2,122 pence as Europe’s biggest oil company today reported a 13 percent drop in second-quarter profit, excluding one-time items and inventory changes, to $5.7 billion. That missed the average analyst estimate of $6.3 billion.