UBS, the European bank with the most losses from the global credit crisis, rallied 7.7 percent after saying it cut holdings of mortgage securities to have its first profitable quarter in more than a year. Fortis, the bank bailed out by Belgium, the Netherlands and Luxembourg, surged 17 percent. Marks & Spencer Group Plc gained 7.5 percent after the retailer's sales beat analysts' estimates.
Europe's Dow Jones Stoxx 600 Index added 1.7 percent to 262.1 as of 12:05 p.m. in London, as 15 of the 18 industry groups advanced. The MSCI Asia Pacific Index lost 1.3 percent.
Futures on the Standard & Poor's 500 Index fell 0.6 percent even after the Senate approved the bank rescue plan. The package, which was rejected earlier by the lower house of Congress, authorizes the purchase of troubled assets from financial companies. It passed the Senate with a 74-25 vote.
Government bonds declined on speculation the region's central bank will resist pressure to lower rates to revive the 15-nation economy.
European officials squabbled over how to respond to the global credit crunch, with Germany opposing a coordinated approach and the Netherlands calling on states to set aside funds to help troubled banks. The conflict undermined efforts to build a consensus European strategy to counter the financial crisis.
National benchmark indexes advanced in 15 of the 18 western European markets that were open. Germany's DAX added 0.7 percent, while France's CAC 40 rose 1.1 percent. The U.K.'s FTSE 100 advanced 1.7 percent.
Asian stocks fell, led by automakers and commodity producers, after U.S. car sales plunged the most in 17 years and the Senate's approval of a $700 billion rescue package failed to ease concern the global slowdown will worsen.
The MSCI Asia Pacific Index dropped 1.4 percent to 107.47 as of 7:22 p.m. in Tokyo, taking this year's decline to 32 percent. Markets in Malaysia, Indonesia, India and Pakistan are shut for holidays today, while China is closed all week.
Japan's Nikkei 225 Stock Average declined 1.9 percent to 11,154.76. Komatsu Ltd. and Hitachi Construction Machinery Co., Asia's two largest excavator makers, led declines after U.S. manufacturing contracted more than forecast, stoking concern demand for their products may slow.