At 1034 GMT, the FTSEurofirst 300 index of top European shares was up 0.9 percent, bringing its gains for the year to 5.3 percent. Although the index's performance so far this year is not as impressive as the 14 percent gains seen at the same time in 2006, European shares have still managed to rise by 9.5 percent since hitting a low point in August during the credit market crisis. France Telecom saw a 6.5 percent increase in its shares after announcing strong results, which also had a positive impact on Vodafone, lifting its shares by 4 percent and making telecoms the best performing sector in Europe. ABB, a Swiss engineering group, experienced a 3.7 percent rise after an 86 percent increase in quarterly earnings due to high demand for power generation infrastructure. Additionally, French competitor Alstom saw a 5.6 percent increase in its shares following a target price raise by Lehman Brothers. Despite expectations of slower earnings growth this quarter, many companies have reported strong numbers. According to Gerhard Schwarz, head of global equity strategy at Unicredit in Munich, the earnings season has the potential to reassure investors as the results have been more positive than feared. However, there is a trend of increased selectivity and it is too early to determine if earnings growth in Europe will slow down less than in the United States. Daimler, a German auto group, reported third-quarter earnings that surpassed expectations, causing its stock to rise by 1.5 percent. In terms of macroeconomic news, U.S. durable goods orders and a reading on U.S. new home sales are expected later in the day, with financial markets already anticipating a 100 percent chance of a cut in U.S. interest rates next week. Recent data from the Ifo economic research institute revealed a decline in its German business climate index in October, in line with market predictions. European markets, including London's FTSE 100, Frankfurt's DAX, and Paris's CAC-40, all increased by more than 1 percent. European stocks have been on a rollercoaster ride, recovering after a 13 percent drop in one month from mid-July, due to cuts in the Federal Reserve's discount and main funds rates. However, the recovery has been fragile, with any negative news about banks' exposure to credit market problems causing declines. U.S. stocks also rebounded on Wednesday following speculation of a potential cut in the discount rate by the Federal Reserve. Despite remaining tight-lipped, the Fed is under pressure to ease monetary policy to alleviate market concerns about earnings and credit markets. Merger and acquisitions, a significant factor in the ongoing bull market, continued to drive up stock prices. Rexel, a French electrical supplier, saw an 8.5 percent increase in shares after announcing plans to divide Dutch competitor Hagemeyer with privately held Sonepar, causing Hagemeyer's shares to drop by 3.3 percent. Generali also experienced a 5.7 percent increase, following a 2.6 percent rise the previous day, after British fund Algebris criticized the Italian insurer's corporate governance and called for reforms. Additionally, Spanish bank Santander saw a 1.6 percent increase in stock prices as its nine-month net profit surpassed market expectations.