Europe Rallies as Dollar Creeps Higher - TheStreet

FRANKFURT -- Stocks rallied to open the week, lifted by Wall Street's gains Friday, Asian gains overnight and a mild rebound in the dollar against the mark.

Currency markets were calm. The dollar was bid around 1.6517 marks, soothing the nerves of European exporters, who watched in horror last week as the dollar plunged below 1.59 marks. The dollar also was up against the yen at 118.37 yen.

Daimler-Benz

(

(dai)

DAI ADR) surged 12% as

The Financial Times

, quoting anonymous sources, reported

Daimler-Benz Aerospace

would merge early next year with

British Aerospace

, which rose 10%.

Gains in

S&P 500

futures, indicating a positive open on Wall Street, also helped instill confidence. Futures at 8 a.m. EDT were up 16.50 at 1008.

In Frankfurt, the

Xetra Dax

was up 240, or 6.1%, at 4213, while in London the

FTSE

was up 130, or 2.7%, at 4954 and in Paris the

CAC

was up 134, or 4.4%, at 3227.

The general mood was so upbeat that the broader market largely ignored a profit warning from German chemical and pharmaceuticals firm

Hoechst

(

(hoe)

HOE ADR), whose shares plunged 10%.

But Tim Wilson, equities trader at

Banque Nationale de Paris

in Frankfurt, remained cautious, noting that volume was light: "Most people just don't believe in this rally."

U.S. credit markets are closed for the Columbus Day holiday, robbing European credit and stock markets of the important impulses of U.S. Treasury yields.

Nonetheless, enough bargain hunters were shopping to lift stocks strongly across the board. The strength in the dollar was particularly helpful to banks, autos and other firms with international exposure.

Deutsche Bank

was up 6.1% and

Banque Nationale de Paris

up 7.6%.

Lufthansa

was up 6.6% and

Unilever

(

(ul) - Get Report

UL ADR) up 5.2%.

Strong gains in Asia -- the

Nikkei

rose 5.2% and

Hang Seng

jumped 5.7% -- helped companies with heavy Asian exposure.

Cable & Wireless

(

(CWP)

CWP ADR) rose 5.2% and

Standard Chartered

added 6.5%.