By Rita Nazareth and David Merritt June 14 (Bloomberg) -- Stocks rose for a fifth day, the longest streak since October for the MSCI World Index, and commodities rallied as growth in European industrial production added to signs the global economic rebound is strengthening. The yen weakened and Treasuries fell. The MSCI World gauge of stocks in 24 developed nations gained 1.2 percent at 9:38 a.m. in New York and the Standard & Poor’s 500 Index increased 0.5 percent. Copper rallied for a fifth day in London, oil climbed 2.5 percent and sugar jumped for an eighth consecutive session. The yield on the 10-year Treasury note climbed six basis points to 3.3 percent and the yen weakened against all 16 of its most-traded counterparts. The MSCI World advanced above the highest closing level since May 19 after industrial production increased more than economists forecast in April, rising 0.8 percent for an 11th month of gains, the European Union said today. The Federal Reserve may say on June 16 that output at U.S. factories, mines and utilities grew 0.9 percent last month after a 0.8 percent increase in April, according to economists surveyed by Bloomberg. “Stocks are so oversold it doesn’t take a whole lot to a get a rebound,” said E. William Stone, who oversees $104 billion as chief investment strategist at PNC Wealth Management in Philadelphia. “The U.S. economic recovery is in place. In Europe, we got positive industrial production data. On a day lacking negative news, it won’t be that hard to get a positive move.” Rally Extended The S&P 500 rose for a third day and added to gains from last week’s 2.5 percent rally, its best since March. A Thomson Reuters/University of Michigan report last week showed improving U.S. consumer sentiment. Alcoa Inc., the biggest U.S. aluminum producer, rose 1 percent and Exxon Mobil Corp. climbed 0.5 percent to pace an advance in commodity producers. Analysts have raised their average 2010 earnings growth forecasts for the S&P 500 to 32 percent from 26 percent at the end of March, according to data compiled by Bloomberg. The improving forecasts came even as the benchmark measure of U.S. equities retreated 13 percent between April 23 and June 4 amid concern some European nations will struggle to finance deficits. The S&P 500 is trading at about 13.4 times analysts’ earnings estimates for the next 12 months, near the lowest level since March 2009. “Fundamentals remain supportive for equities and equity volatility should revert to lower levels,” Nomura Holdings Inc.’s London-based strategist Ian Scott wrote in a note dated June 11. “The coming earnings announcement season should provide the catalyst for equity investors to focus on the value on offer and for equities to recover.” Fed Watch Federal Reserve Bank of St. Louis President James Bullard, speaking in Tokyo today, said Europe’s debt crisis shouldn’t cause the Fed to postpone raising interest rates as the economy recovers. The central bank has kept its benchmark lending rate at a record-low range near zero since December 2008 to foster growth. The Stoxx Europe 600 Index rallied 1 percent as 18 of 19 industry groups gained, while the MSCI Asia Pacific Index climbed 1.5 percent to the highest in almost four weeks. BHP Billiton Ltd. and Rio Tinto Group climbed more than 2.4 percent in London. Axa SA, Europe’s second-biggest insurer, rose 2.6 percent in Paris after saying it’s in talks to sell part of its U.K. life insurance unit to Clive Cowdery’s Resolution Ltd. for 2.75 billion pounds ($4 billion). BP Slumps BP Plc, struggling to contain its oil spill in the Gulf of Mexico, slipped 6.5 percent in London. The company faces a U.S. deadline today for a plan to raise oil-containment capacity as President Barack Obama demands an escrow account for damages claims related to the worst environmental disaster in the nation’s history. Developing-nation stocks rose for a fifth day, the longest winning streak in two months, with the MSCI Emerging Markets Index gaining 1.7 percent. Benchmark gauges in Taiwan, South Africa, Thailand and Qatar advanced more than 1 percent. South Korea’s won strengthened 2 percent against the dollar, the best performer among 26 emerging-market currencies, after policy makers said they will give banks time to meet a new ceiling on forward contracts, holding off from imposing controls on capital flows Copper for delivery in three months gained 2.1 percent to $6,614.50 a metric ton on the London Metal Exchange. Prices have climbed for five days in a row, the longest advance since Jan. 4. Crude oil futures for July delivery increased $1.85 to $75.63 a barrel on the New York Mercantile Exchange. White, or refined, sugar for August delivery jumped as much as 0.7 percent to $527.40 a metric ton, the highest price since March, on the Liffe exchange in London. Prices have climbed for eight days, the longest advance since June 2008. Treasuries Drop The yield on the two-year Treasury note increased four basis points to 0.77 percent, and the 30-year bond yield rose eight basis points to 4.23 percent. German 10-year bunds fell, with the yield advancing seven basis points to 2.64 percent. The Belgian 10-year yield jumped 11 basis points to 3.47 percent. Flemish nationalists took the lead in Belgium’s general elections, setting up coalition talks with French-speaking Socialists who face demands from Dutch-speaking voters to give more powers to the nation’s regions. The cost of protecting European corporate bonds from default fell, with the Markit iTraxx Crossover Index of credit- default swaps on 50 mostly junk-rated companies declining 21 basis points to 575, the lowest in 1 1/2 weeks, according to Markit Group Ltd. The yen dropped 0.2 percent to 91.79 per dollar, and weakened 1.3 percent against the euro to 112.45. The dollar depreciated 1.1 percent to $1.2238 versus the euro. The pound climbed 1.4 percent to $1.4748 and gained 0.2 percent to 83.1 pence per euro after the Office for Budget Responsibility said Britain’s deficit will be 22 billion pounds ($32 billion) lower than the Treasury had forecast for 2010-2015. To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; David Merritt in London on dmerritt1@bloomberg.net

Source