European stock indexes jumped amid US and Russia agreement over Syrian chemical weapons

European stocks rose, extending to a new five-year high, after Lawrence Summers withdrew from consideration as Federal Reserve chairman, paving the way for Janet Yellen, who investors say will favor a slower reduction of stimulus. US and Russia came to an agreement over destroying Syrian chemical weapons.

The Stoxx Europe 600 Index rose 0.8% to 313.87 at 9:47 a.m. in London, the highest level since June 2008. The benchmark has climbed 5.6% this month as Chinese economic reports beat forecasts and the U.S. backed away from military action against Syria over a chemical-weapons attack that America says killed more than 1,400 people.

“The markets are having a bounce on the back of the Larry Summers news and the ongoing Syria talks,” Kevin Lilley, head of European equities at Old Mutual Global Investors, which manages about $17 billion, said by phone for Bloomberg. “The market would prefer Yellen because it would be seen as more of the same. She would be more Bernanke-like in her approach and take longer to ease the current policy.”

John Kerry and Russian Foreign Minister Sergei Lavrov agreed on a deal which reflects calls for early signs of progress, giving Assad one week to submit an inventory of his toxic weapons, and calls for initial inspections in Syria by November.

The Stoxx 600 may climb to 345 by the end of 2014, an 11% gain from last week’s close, Gareth Evans and Thomas Pearce, strategists at Deutsche Bank AG in London, wrote in a report dated Sept. 13. Earnings can increase by 10% next year, they said.

“The PMIs are indicating that the global economy is beginning to regain traction,” Evans and Pearce said, referring to surveys of purchasing managers. “This should mean that earnings-expectation cuts will soon come to an end.”

In European corporate news, EasyJet jumped 2.2% to 1,328 pence, while IAG, the owner of British Airways, soared 2.5% to 322.6 pence.

H&M rallied 3.5% to 257.90 kronor, the highest since September 2010. Europe’s second-biggest clothing retailer said revenue at stores open at least a year rose 4% in August compared with the same month last year. The average estimate in a SME Direkt survey was for a 2.5% increase.