Stocks rose, extending the MSCI World Index’s longest monthly winning streak since the credit-market seizure began, after economic reports from Japan and India signaled the worst of the global recession may be ending. Crude oil climbed and the dollar weakened. The MSCI World added 0.9 percent at 11:02 a.m. in London, extending its advance in May to 7.9 percent. The gauge of 23 developed nations has climbed for three straight months, the best performance since the middle of 2007, when the value of securities tied to subprime mortgages collapsed, freezing credit markets. Oil rose 1.2 percent to $65.87 in New York, the highest in almost seven months, as investors speculated more than $13 trillion in government stimulus measures will alleviate the worst contraction since the Great Depression after $1.47 trillion in losses and writedowns at the world’s biggest financial companies. Japan’s industrial output increased the most since 1953 in April, India’s economy grew more than analysts estimated last quarter, and Poland expanded in the first quarter, government reports showed. “There’s certainly some relief at the moment as the rate of deterioration appears to have slowed,” said John Anderson, who helps oversee $3 billion at Rensburg Fund Management in London. “The banking sector is out of the intensive care unit. But I suspect it will take a while before we fully recover given the sheer amount of debt out there.” Dollar Drops The U.S. dollar weakened 1 percent against the euro and 0.9 percent against the yen, extending its drop after the Dollar Index slid below 80. The gauge tracks the greenback against the euro, yen, pound, Swiss Franc, Canadian dollar and Swedish krona. The dollar dropped 1.5 percent versus the Australian dollar and 1.7 percent against the New Zealand dollar, as signs of a recovery stoked demand for commodity-exporting countries. The greenback also slipped as South Korea’s National Pension Service, which had about $187 billion of assets at end-2008, pared its allocation for Treasuries over the next five years. The pound rose to the highest level since November, poised for its biggest monthly gain in 24 years, after a report showed U.K. house prices unexpectedly jumped in May. The pound strengthened to as much as $1.6128, before trading up 1.1 percent at $1.6111. Treasury Notes Yields on 10-year Treasury notes slipped two basis points to 3.59 percent after soaring to the highest since November this month. The difference in yields between two-year and 10-year securities was 264 basis points today. It increased to 276 basis points on May 27, the widest on record. “The bond market seems to be testing the credibility of the Fed,” said Mickael Benhaim, head of global bonds at Pictet & Cie Banquiers in Geneva. “Yields are rising, suggesting investors are demanding inflation premiums. I think the exit of this crisis will be reflationary given all the liquidity that has been thrown into the market and the huge level of indebtedness at the national level.” European government bonds snapped five days of losses, with the 10-year bund yield falling six basis points to 3.60 percent. Biggest Monthly Gain Oil is headed for its biggest monthly gain since March 1999, when Asia was recovering from the 1997-1998 financial crisis and fuel demand started rising in China and India. U.S. crude inventories fell more than analysts estimated while the Organization of Petroleum Exporting Countries left production quotas unchanged at a meeting in Vienna yesterday, betting on a recovery in demand. Copper for delivery in three months rose as much as 0.6 percent to $4,777 a metric ton on the London Metal Exchange, a three-week high. Gold for immediate delivery added as much as 1.1 percent to $969.80 an ounce, the highest in three months. Silver rose almost 2 percent, heading for its biggest monthly gain in 22 years as the dollar’s drop increased demand for precious metals as an alternative investment. The ruble strengthened 1.2 percent to 30.9640 versus the dollar, extending this month’s gain to 7 percent. South Africa’s rand gained as much as 1.1 percent to 7.9335 against the U.S. currency, the lowest since September. Extra Yield The extra yield investors demand to hold company bonds rather than government debt narrowed as investors sought the higher returns on corporate securities. The spread tightened to 3.18 percentage points, from 3.71 percentage points a month ago and 4.63 on March 20, according to Merrill Lynch & Co.’s Euro Corporates index. Corporate bond sales in euros and pounds surged to a record 603 billion euros ($844 billion) this year, almost double the 358 billion euros issued in the same period of 2008, according to data compiled by Bloomberg. Paris-based Pernod Ricard SA, the world’s second-largest distiller, and Virgin Media Inc. this week sold the biggest junk bonds in Europe since the credit crunch froze issuance two years ago. The Dow Jones Stoxx 600 Index of European shares added 1.1 percent today as commodity producers advanced, extending its monthly gain to 5 percent. Futures on the Standard & Poor’s 500 Index climbed 0.6 percent before reports that economists said may show confidence among U.S. consumers gained in May for a third month and business activity shrank the least since September. U.S. Economy U.S. gross domestic product shrank at a 5.5 percent annual rate from January through March, compared with an initial 6.1 percent estimate, data from the Commerce Department may show today. The world’s largest economy shrank at a 6.3 percent annual rate in the last three months of 2008. China’s growth prospects have improved from three months ago, according to a Bloomberg survey of 14 economists. BHP Billiton Ltd., the world’s largest mining company, rose 3 percent to 1,474 pence on the increase in metals prices. Rio Tinto Group, the third-biggest mining company, gained 1.2 percent to 2,789 pence. Both companies are based in London. Oil’s advance sent Paris-based Total SA, Europe’s third- largest oil company, up 1.6 percent to 40.70 euros. London-based Royal Dutch Shell Plc rose 1.1 percent to 1,663 pence.

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