European stocks close

European stocks advanced to the highest level in more than five years, with the Stoxx Europe 600 Index gaining for a second month, as better-than-estimated earnings outweighed speculation the Federal Reserve may trim bond purchases sooner than forecast.

The Federal Open Market Committee yesterday kept its monthly bond purchases at $85 billion and said that while it sees signs of strength in the U.S. economy, it would wait for more evidence of sustained improvement before slowing stimulus. In a statement released after a two-day meeting, the FOMC dropped its warning from last month that tighter financial conditions could impair recovery.

The odds for the Fed to start reducing bond purchases in January rose to 45 percent from 25 percent before the statement, Citigroup Inc. said. Economists surveyed by Bloomberg Oct. 17-18 predicted the Fed would wait until March to begin the cuts.

A release today showed fewer Americans filed first-time applications for jobless benefits last week. Economists in another poll predict the Institute for Supply Management will say tomorrow its manufacturing index fell in October.

In the euro area, the inflation rate unexpectedly dropped in October, fueling speculation the European Central Bank will cut interest rates to boost recovery. The ECB holds its next policy meeting on Nov. 7.

National benchmark indexes rose in 11 of the 18 western European markets. Germany’s DAX advanced 0.3 percent to a record, and France’s CAC 40 gained 0.6 percent. The U.K.’s FTSE 100 slid 0.7 percent.

BNP Paribas rose 3.4 percent to 54.54 euros after France’s largest bank posted an unexpected increase in earnings as it set aside fewer provisions for bad debts and pared costs. Net income climbed to 1.36 billion euros ($1.85 billion) from 1.33 billion euros a year earlier, beating the 1.19 billion-euro average estimate of six analysts.

Alcatel-Lucent surged 19 percent to 2.82 euros. The French network-equipment maker said its third-quarter net loss fell to 200 million euros from a 316 million-euro loss a year earlier. Analysts had predicted a 274 million-euro loss, according to data. The company also said it will exceed its full-year target for cost savings.

Anheuser-Busch InBev NV gained 2.8 percent to 76.60 euros. The world’s biggest brewer said consolidated earnings before interest, taxation, depreciation and amortization rose 10.5 percent in the three months through Sept. 30. The median estimate of nine analysts surveyed had called for growth of 5.7 percent.

Ingenico advanced 5.6 percent to 55.46 euros, climbing the most since September 2012. The provider of payment terminals and services said third-quarter revenue rose to 348 million euros from 311 million euros a year ago. The French company also boosted its full-year forecasts.