European stocks rallied for a ninth day, their longest winning streak since June 2010, as companies from Novartis AG to Reckitt Benckiser Group Plc raised forecasts and the U.S. unemployment rate fell to an almost five-year low.
U.S. stocks rose, with the Standard & Poor’s 500 Index trimming a weekly decline, as optimism grew that the lawmakers would reach a deal to end the budget impasse and avoid a default on the federal debt.
The dollar gained with U.S. stocks as a report showed the American economy grew more than forecast last quarter. Oil slid from a two-year high while European shares rose for the first time in four days.
European stocks rose to a three-week high, completing their biggest weekly gain since April, as investors bet that any tapering of Federal Reserve stimulus will be more gradual than previously anticipated.
European stocks rose for a fifth week as investors bet central banks would add to measures to stimulate economic growth, with the Stoxx Europe 600 Index paring some gains on concern that risks to a recovery remain.
U.K. stocks advanced, with the FTSE 100 Index heading for its longest streak of monthly gains since 1997, as reports showed durable-goods orders and house prices in the U.S. climbed more than estimated.