By Sara Sjolin, MarketWatch

German business confidence survey misses forecasts

European stocks rose for a second straight session on Wednesday, with optimism over fresh records in the U.S. markets and a rally on bank stocks propelling indexes higher.

The Stoxx Europe 600 index climbed 0.7% to 364.32, setting it on track for its highest close since Jan. 13.

"Investors over in Europe are building up on the momentum, which was passed by the U.S. markets overnight," said Naeem Aslam, chief market analyst at ThinkMarkets UK, in a note.

"Markets had been waiting for Donald Trump's infrastructure spending proposaland he finally unleashed some details. Mr. Trump signed an executive order in extending the North Dakota pipeline (http://www.marketwatch.com/story/trump-signs-orders-to-push-keystone-dakota-pipelines-2017-01-24). This will create thousands of more jobs, and it will collect more tax revenue for the government," he added.

Both the S&P 500 index and Nasdaq Composite ended at all-time closing highs on Tuesday (http://www.marketwatch.com/story/dow-futures-in-holding-pattern-ahead-of-raft-of-earnings-2017-01-24), while the Dow Jones Industrial Average inched closer to the 20,000 level.

In Europe on Wednesday, Germany's DAX 30 index gained 1.3% to 11,743.25, while France's CAC 40 index added 1.1% to 4,882.62. The U.K.'s FTSE 100 index rose 0.7% to 7,197.20.

Spain's IBEX 35 index rallied 1.8% to 9,556.10, buoyed by Banco Santander SA (SAN) (SAN) .

Bank cheer: Banco Santander shares jumped 4.7% to 5.40 euros after the Spanish lender reported a rise in profit (http://www.marketwatch.com/story/santander-profit-buoyed-by-fees-lending-2017-01-25) on higher fees and stronger-than-expected lending income. A close at this level would the be the strongest since August 2015.

As Banco Santander is the first of the major European banks to report, its upbeat earnings statement spurred optimism over the coming results from other lenders.

Shares of BBVA SA (BBVA) (BBVA) added 3.1%, Société Générale SA (GLE.FR) climbed 2.4%, and UniCredit SpA (UCG.MI) gained 3.8%.

Deutsche Bank AG (DBK.XE) (DBK.XE) put on 2.5% following a Reuters report the German bank is considering spinning off its asset management business (http://uk.reuters.com/article/us-deutsche-bank-asset-management-ipo-idUKKBN1582EJ) through an initial public offering.

On a more downbeat note in the sector, shares of Intesa Sanpaolo SpA (ISP.MI) slid 3% after the Italian bank said it's eyeing a tie-up with AssicurazioniGenerali SpA (G.MI) . Assicurazioni Generali added 2% in Milan.

The Stoxx Europe 600 Banks Index rose 2.2% to 177.72, on track for its highest close in more than a year.

Other movers: Logitech International SA (LOGI) rallied 14% after the computer-accessories company posted earnings ahead of forecasts.

Novartis AG (NOVN.EB) (NOVN.EB) put on 2.2%. The Swiss pharmaceutical company said it may spin off its ailing eye-care business Alcon (http://www.marketwatch.com/story/novartis-may-spin-off-alcon-eye-care-unit-2017-01-25).

BHP Billiton (BLT.LN) (BHP.AU) (BHP.AU) on Wednesday said it now expects to supply 1.62 million metric tons of copper during the year through June. That's 2% lower than its prior forecast (http://www.marketwatch.com/story/bhp-billiton-warns-of-lower-copper-output-2017-01-24). BHP shares were up 1.8%.

Economic news:French business sentiment was unchanged (http://www.marketwatch.com/story/french-business-sentiment-unchanged-in-january-2017-01-25) in January, as company executives reported a slowdown in output recently. But they struck a more optimistic tone for the future, according to official statistics agency Insee.

German business confidence missed forecasts in January. The Ifo business climate index came in at 109.8, below expectations of a 111.3 reading.

In European Central Bank news, executive board member Sabine Lautenschläger late Tuesday signaled the ECB should soon start to taper its aggressive bond-buying program (http://www.marketwatch.com/story/ecbs-lautenschlaeger-optimistic-qe-end-is-near-2017-01-25).

(END) Dow Jones Newswires

January 25, 2017 04:35 ET (09:35 GMT)

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