European Markets Fly High on News From Across Atlantic

As hot as the U.S. stock market is, it’s a piker compared with European stocks.

Most major European markets soared anew on Wednesday, drawing strength from expectations for continued moderate U.S. interest rates, and from the stronger dollar.

The German market’s key index zoomed 175.67 points, or 4.2%, to a record 4,406.09, in the biggest rally this year.

In France, the key index jumped 2.8%, while Dutch shares leaped 2.9% and Italian shares were up 1.8%.

The gains left German stocks up a stunning 52.5% year-to-date, French shares up 29.7% and Italian shares up 47.2%. In contrast, the U.S. Standard & Poor’s 500 index is up 26.4%.

European markets have been bolstered by low interest rates and by expectations for stronger corporate earnings amid a surge in restructurings and merger activity. On Monday, two major German banks stunned investors by announcing plans to merge.

In addition, the streaking dollar is boosting European exporters’ profit prospects.

But the same strong dollar also reduces European stock gains for American investors: In dollar terms, the German market is up 28.9% this year.