BLBG: Commodities Rally on Growth Outlook; Euro Gains
By Claudia Carpenter
June 10 (Bloomberg) -- Stocks and commodities rallied after economic reports from China, Japan and Australia showed accelerating growth, while the euro strengthened for a third day and gold fell. BP Plc shares touched a 13-year low in London.
The Standard & Poor’s 500 Index increased 1.8 percent to 1,074.88 at 9:38 a.m. in New York, while the MSCI Asia Pacific Index and the Stoxx Europe 600 Index rose more than 1 percent. The cost of insuring BP bonds using credit-default swaps rose to a record amid pressure from U.S. lawmakers for the company to do more to clean up the Gulf of Mexico oil spill. The euro advanced 1 percent to $1.21, while the New Zealand dollar strengthened versus all 16 of its most-traded peers and Australia’s dollar rising against all but the so-called kiwi.
China’s exports jumped the most in six years in May, rising 48.5 percent from a year earlier, the nation’s customs bureau said, surpassing all 32 estimates in a Bloomberg News survey of economists. Japan’s economy grew at an annualized 5 percent rate in the three months to March. China’s national pension fund said the euro will survive Europe’s debt crisis, according to a Reuters report.
“Macro data has been good and the signs of a modest recovery are on track,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which holds $90 billion. “Macro economic data hasn’t really suffered. Volatility has been settling down a bit compared to what it was.”
The S&P 500 erased yesterday’s 0.6 percent drop even as more Americans than anticipated filed applications for unemployment benefits last week, a sign firings remain elevated even as the economy is expanding. Initial jobless claims dropped by 3,000 to 456,000 in the week ended June 5, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected 450,000 claims, according to the median forecast. The number of
Most Since 2008
A separate report showed the trade deficit in the U.S. widened in April to the highest level in more than a year as exports fell more than imports. The gap grew 0.6 percent to $40.3 billion, the most since December 2008, Commerce Department figures showed today in Washington. The increase signals trade will subtract from economic growth this quarter.
BP fell 6.5 percent in London, paring losses of as much as 12 percent. The stock has tumbled almost 40 percent since the April 20 explosion at its Deepwater Horizon rig in the Gulf of Mexico, triggering the worst oil spill in U.S. history. Credit- default swaps insuring BP’s debt for five years surged 208 basis points to an all-time high 594, according to CMA DataVision.
Almost four shares rose for every one that fell on the Stoxx 600. Automakers were the biggest gainers among 19 industry groups on the European benchmark index. Daimler AG rallied 3.4 percent in Frankfurt after forecasting Mercedes-Benz sales will advance at twice the rate of the overall market on demand from China. Lafarge SA, the world’s biggest cement maker, gained 3.7 percent in Paris after Citigroup Inc. recommended buying the shares.
Asian Stocks
Asian stocks rose the most in a week. Commonwealth Bank of Australia gained 1.3 percent in Sydney. Dentsu Inc., Japan’s biggest advertising agency, rose 2.6 percent in Tokyo. Developing-nation shares climbed for a third day, with the MSCI Emerging Markets Index advancing 0.2 percent. Benchmark indexes in India, Taiwan, and the Czech Republic jumped more than 1 percent.
Australian employers added workers in May for a third straight month, the statistics bureau said in Sydney today. The number of people employed gained 26,900 from April, compared with the median estimate of 23 economists surveyed by Bloomberg News of a 20,000 increase.
Euro Strengthens
The euro strengthened 0.6 percent to 109.97 yen, appreciating versus 10 of its 16 most-active counterparts.
The 16-nation euro will survive Europe’s debt crisis, the head of China’s national pension fund said, according to a report by Reuters. Dai Xianglong, chairman of the National Council for Social Security Fund, also said China faces the risk of losses on its currency reserves because of growing debt in the U.S., according to the report.
The dollar weakened against 15 of its 16 most-traded peers, and was little changed at 91.24 yen.
South Korea’s won slumped to its lowest level in two weeks after Vice Finance Minister Yim Jong Yong said the government will “soon” announce plans to reduce volatility in capital flows. The won closed 0.2 percent lower at 1,251.05 per dollar.
Gold for immediate delivery dropped 0.4 percent to $1,225.50 an ounce, the third consecutive decline. Copper for delivery in three months slipped 0.1 percent to $6,330 a metric ton on the London Metal Exchange. Crude oil for July delivery rose for a third day, adding 0.7 percent to $74.88 a barrel on the New York Mercantile Exchange.
Spanish Auction
Spanish bonds rose as the government auctioned three-year notes, with demand higher than at an auction of similar-maturity securities in April.
The yield on the 10-year bond fell 11 basis points to 4.52 percent, with the extra yield investors demand to hold the securities instead of benchmark German bunds narrowing 11 basis points to 194. The yield on the bund was unchanged at 2.57 percent.
The European Central Bank left its main refinancing at a record-low 1 percent, and the Bank of England kept its key rate at 0.5 percent.
The U.S. auctions $13 billion of 30-year bonds, the last of three auctions this week. The yield on the security maturing in May 2040 rose three basis points to 4.14 percent.
To contact the reporter for this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net
