European stocks post weekly gain; Lafarge, Holcim advance

European stocks rose this week, led by construction companies and commodity producers, on speculation a U.S. stimulus plan will prevent a prolonged recession in the world's largest economy.

Lafarge SA, the biggest cement maker, and Holcim Ltd. climbed at least 11 percent as President-elect Barack Obama said he is planning the most extensive public-works spending package since the 1950s. Rio Tinto Group, the third-largest mining company, surged 42 percent after saying it will reduce debt. Gains in the Dow Jones Stoxx 600 Index were limited after the Senate rejected a $14 billion plan to rescue U.S. carmakers.

Lafarge gained 11 percent. Holcim, the world's second- biggest cement maker, advanced 19 percent. Lafarge gets 24 percent of its sales in North America, while Holcim generates almost 20 percent of revenue there.

Obama said Dec. 6 he will boost investment in roads, bridges and public buildings to create and preserve 2.5 million jobs. That's the largest public works program since President Dwight D. Eisenhower created the interstate highway system.

The Stoxx 600 added 4.4 percent to 198.22, bringing the rebound from this year's low in November to 8.8 percent as governments from the U.S. to India announced packages to buoy the global economy and prevent earnings from tumbling.

Stimulus "plans offer oxygen as we face an accumulation of bad news," said Pierre Nebout, a fund manager at Edmond de Rothschild Asset Management in Paris, which oversees $3.9 billion in stocks. "The market welcomes them," he said in a Bloomberg Television interview.