At 1034 GMT, the FTSEurofirst 300 index of top European shares increased by 0.9 percent, bringing its total gains for the year to 5.3 percent. Although this year's performance is weaker compared to the 14 percent gains seen in 2006 at this time, European shares have still risen by 9.5 percent from a low point in August when concerns about credit market issues were at their peak. France Telecom saw a notable increase of 6.5 percent after announcing strong results, which also positively impacted Vodafone by 4 percent, making the telecommunications sector the top performer in Europe. ABB, a Swiss engineering group, experienced a 3.7 percent rise in its stock price due to an 86 percent increase in quarterly earnings driven by high demand for power generation infrastructure. Additionally, French competitor Alstom saw a 5.6 percent increase as Lehman Brothers raised its target price for the stock. While there were expectations of slower earnings growth this quarter following a strong period, many companies have reported robust numbers. Gerhard Schwarz, head of global equity strategy at Unicredit in Munich, stated that the earnings season could reassure investors, with results exceeding expectations and having a positive impact on sentiment. However, there is a trend of increased selectivity, and it is too early to determine if earnings growth in Europe will slow less than in the United States. Daimler, a German auto group, reported third-quarter earnings that surpassed forecasts, leading to a 1.5 percent increase in its stock. On the macroeconomic front, U.S. durable goods orders and new home sales data 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. Earlier data from the Ifo economic research institute showed a slight dip in its German business climate index for October, in line with market expectations. In European markets, London's FTSE 100, Frankfurt's DAX, and Paris's CAC-40 all increased by more than 1 percent. European stocks have experienced a rebound after a 13 percent drop in one month from mid-July, with help from cuts in the Federal Reserve's discount and main funds rates. However, the recovery has been vulnerable to negative news about banks' exposure to credit market issues, and the European benchmark has fallen for one week for every week it has gained in the 14 weeks since mid-August. U.S. stocks also saw a recovery on Wednesday following speculation of a upcoming cut in the discount rate. UBS's forex strategists noted on Thursday that the Federal Reserve has not confirmed any market speculation, but with risk sentiment showing signs of stress after several disappointing earnings reports and concerns about credit market problems resurfacing, expectations for another Fed easing move have increased significantly. Merger and acquisitions, which have been a significant factor in the recent bullish market trend, continued to drive up stock prices. Rexel, a French electrical supplier, saw an 8.5 percent increase in its shares after announcing plans to divide Dutch competitor Hagemeyer with Sonepar. Hagemeyer's shares, on the other hand, dropped by 3.3 percent. Generali's stock rose by 5.7 percent, following a 2.6 percent increase the day before, as British fund Algebris criticized the Italian insurer's corporate governance and called for changes. Santander, a Spanish bank, also saw a 1.6 percent increase in its shares after reporting higher-than-expected nine-month net profit.