European stocks climbed for a third straight day as investors speculated the Obama administration’s plan to rid banks of toxic assets will spur growth and investor Mark Mobius said a new bull market has begun. Deutsche Bank AG and BNP Paribas SA rose more than 4 percent as the U.S. Treasury said it will finance as much as $1 trillion in purchases of distressed assets. Barclays Plc added 11 percent amid speculation it may sell its iShares unit in a transaction valued at as much as $5 billion. “We think the outcome of Timothy Geithner’s plans will encourage the markets further on and we will have a lot of good performances in the next few weeks,” said Herbert Perus, head of global equities at Raiffeisen Capital Management in Vienna, which has the equivalent of $62 billion. “There are a lot of opportunities in the market right now.” The Dow Jones Stoxx 600 Index gained 2 percent at 2:13 p.m. in London, trimming its 2009 retreat to 11 percent. The gauge has rebounded 11 percent from a 12-year low March 9 as Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. said they made money in the first two months of 2009 and the Federal Reserve said it would buy $300 billion of government bonds to combat the worst financial crisis since the Great Depression. The Standard & Poor’s 500 Index increased 3.7 percent. The Public-Private Investment Program will use $75 billion to $100 billion from the $700 billion Troubled Asset Relief Program enacted last year, giving the government “purchasing power” of $500 billion, the Treasury said today in a statement. The program may double “over time,” it said. U.S. Home Sales Stocks in Europe and the U.S. extended their gains after data from the National Association of Realtors showed that sales of previously owned homes in America unexpectedly climbed in February as record foreclosures brought bargain hunters into the market to take advantage of lower prices. The dollar weakened and the yen fell to a five-month low against the euro on speculation additional U.S. steps to help banks dispose of toxic assets will spur demand for higher- yielding currencies. The gains in stocks damped demand for government securities, pushing U.S. Treasuries down for a third day. U.S. bonds earlier had erased losses after a Chinese official said the nation will keep buying the securities as they are an “important element” of the country’s reserves. The MSCI Emerging Markets Index of 23 developing nations gained 4.1 percent, erasing its 2009 drop. Mobius said emerging markets are in “better shape” than developed economies. ‘Be Careful’ “You have to be careful not to miss the opportunity,” said Mobius, who helps oversee about $20 billion of emerging- market assets as executive chairman at San Mateo, California- based Templeton Asset Management Ltd. “With all the negative news, there is a tendency to hold back,” he said in a Bloomberg Television interview from Hong Kong. National benchmark indexes climbed in all 18 western European markets except Sweden and Ireland. The U.K.’s FTSE 100 rose 1.8 percent, led by Barclays on speculation Hellman & Friedman LLC will bid for its iShares unit along with a group of private equity firms. Germany’s DAX added 1.7 percent and France’s CAC 40 advanced 1.5 percent. Deutsche Bank, Germany’s largest bank, rose 4.8 percent to 29.67 euros. BNP Paribas added 5.2 percent to 33.30 euros. Geithner has crafted an approach to spur investment funds to purchase -- and banks to unload -- the illiquid securities and loans that have caused credit to dry up. The Treasury, Fed and the Federal Deposit Insurance Corp. will all play a role alongside private investors. Geithner’s Credibility The announcement is a major test for Geithner, whose first speech on the financial rescue Feb. 10 offered so few details that it triggered a 4.9 percent drop in the S&P 500. Adding to the pressure on the administration is a wave of populist anger over the rescue thus far, following the revelation employees of American International Group Inc. got at least $165 million in bonuses after the insurer received a $173 billion bailout. While bank stocks have climbed, bonds of the companies yield 8.55 percentage points more than Treasuries, about the widest in 13 years, according to Merrill Lynch & Co. indexes. The gap between yields of financial institutions’ bonds and Treasuries widened even as their shares jumped, suggesting this month’s record rally is in jeopardy. Barclays Gains Barclays added 12 percent to 117.2 pence. The U.K.’s third- largest bank has set a deadline for offers for the end of this week, a person with knowledge of the situation said. A New York- based Hellman & Friedman spokesman declined to comment on the possible bid. Nicola Hankey, a Barclays’ spokeswoman, declined to comment when contacted by Bloomberg News. European automobile shares rose after Goldman Sachs Group Inc. boosted its recommendation on the industry to “attractive,” saying now is the “best buying opportunity in 10 years.” Renault SA gained 1.3 percent to 15.21 euros.

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