European stocks close:

European stocks advanced, after yesterday tumbling the most in four weeks, as technology companies rallied, outweighing worsening economic data from the euro area.

SAP AG (SAP) gained 4.2 percent after the world’s biggest maker of business-management software raised its full-year revenue target as license sales beat estimates. STMicroelectronics NV (STM) climbed 4.2 percent on plans to cut costs. Volvo AB and Nordea Bank AB (NDA) retreated more than 1.5 percent after the companies reported third-quarter earnings that missed projections.

The Stoxx Europe 600 Index (SXXP) rose 0.4 percent to 269.52 at the close in London, after earlier falling as much as 0.4 percent.

Stocks slid earlier as separate reports showed euro-area services and manufacturing output have contracted more than economists had forecast, while German business confidence unexpectedly declined.

In Munich, the Ifo institute said its business-climate index, based on a survey of 7,000 executives, dropped to 100 from 101.4 in September. That’s the sixth straight decline and the lowest reading since February 2010. Economists had predicted an increase to 101.6.

National benchmark indexes climbed in 15 of the 18 western- European markets.

FTSE 100 5,804.78 +6.87 +0.12% CAC 40 3,426.49 +19.99 +0.59% DAX 7,192.85 +19.16 +0.27% 

Stocks also advanced today after a report in China showed a measure of manufacturing in the world’s second-largest economy rose for October. The preliminary reading of a purchasing managers’ index from HSBC Holdings Plc and Markit increased to 49.1. The final level in September was 47.9.

SAP rallied 4.2 percent to 55.07 euros after the company said sales of new licenses, an indicator of future revenue, increased 12 percent to 1.03 billion euros ($1.3 billion), excluding currency swings. That exceeded the average analyst estimate of 980 million euros. The company also forecast that growth in software and related services sales, based on non-IFRS accounting rules, will reach the upper end of a range of 10.5 percent to 12.5 percent this year, because of contributions from Ariba Inc. and

STMicroelectronics gained 4.2 percent to 4.85 euros after Europe’s largest chipmaker said it will cut costs by $150 million a year by the end of 2013 and will temporarily close plants. The company forecast that fourth-quarter revenue may fall as much as 5 percent amid weakening demand in Europe.

ASML Holding NV (ASML), Europe’s largest semiconductor-equipment supplier, advanced 2.7 percent to 41.58 euros. ARM Holdings Plc (ARM) climbed 5.6 percent to 675.5 pence, extending yesterday’s 7.7 percent rally.

Volkswagen AG climbed 3.1 percent to 151 euros after Europe’s largest carmaker reported earnings that met analysts’ estimates and sales that increased. Operating profit fell 19 percent in the third quarter to 2.34 billion euros, in line with the 2.39 billion-euro average analyst estimate. Sales rose 27 percent to 48.8 billion euros.

Reckitt Benckiser Group Plc (RB/) gained 3.7 percent to 3,768 pence, the highest price since at least 1988, after the maker of Nurofen reported revenue that beat estimates.

Telenor ASA (TEL) jumped 6.1 percent to 110.70 kroner after Norway’s largest phone operator reported a 41 percent surge in third-quarter net income to 3.65 billion kroner ($634 million) helped by increasing sales in markets such as Thailand and Malaysia. Analysts had predicted profit of 3.4 billion kroner, the average of estimates compiled by Bloomberg. Sales advanced 2.5 percent to 25.3 billion kroner.

PSA Peugeot Citroen dropped 4.6 percent to 5.56 euros after the French government guaranteed as much as 7 billion euros of new bonds for Europe’s second-largest carmaker in exchange for greater influence over its strategy.