By Stephen Kirkland June 15 (Bloomberg) -- U.S. stock-index futures rose before reports that may indicate the economy is strengthening. Bonds fell in euro-region countries with the biggest deficits after Greece was downgraded four levels by Moody’s Investors Service. Futures on the Standard & Poor’s 500 Index gained 0.5 percent at 10:40 a.m. in London, while the Stoxx Europe 600 Index added 0.5 percent. The yield on the Greek 10-year bond jumped 53 basis points to 9.10 percent. Oil gained 0.9 percent, reversing an earlier decline. Moody’s downgrade of Greece’s debt to junk rekindled concern Europe’s debt crisis may worsen, while Morgan Stanley Asia Ltd. Chairman Stephen Roach said he sees a “wrenching” fiscal consolidation for Europe. About $6 trillion has been erased from global equities from their highs in April on speculation European government spending cuts will slow the global economic recovery. “What you have is a situation where the headline comes up saying four-notch downgrade and the initial instinct is to sell first and ask questions later,” Gary Jenkins, head of credit research at Evolution Securities Ltd. in London, said in an interview. “Greece being junk shouldn’t be a shock. But there’s a lack of confidence in the market and you only need a little bit of bad news to send it lower.” New York Manufacturing The gain in U.S. futures indicated the S&P 500 may reverse yesterday’s 0.2 percent drop. Factories in the New York Fed district expanded for an 11th month, economists said before a report due at 8:30 a.m. New York time. A report at the same time from the Labor Department may show the import-price index dropped 1.3 percent in May, after an increase of 0.9 percent the prior month, according to the median of economists surveyed, indicating inflation isn’t a threat as the economy recovers. The MSCI World Index of stocks in 24 developed nations fell 0.3 percent, while the MSCI Asia Pacific Index was little changed. Esprit Holdings Ltd., a clothing chain that gets 85 percent of its revenue from Europe, lost 3.3 percent in Hong Kong. In Europe, three shares fell for every two that gained. Banco Santander SA, Spain’s largest lender, fell 1.8 percent in Madrid. Declines were limited as British Sky Broadcasting Group Plc, the U.K.’s largest pay-TV provider, surged 19 percent in London as it spurned an $11.5 billion offer from Rupert Murdoch’s News Corp. Emerging Markets The MSCI Emerging Markets Index declined for the first time in six days, losing as much as 0.4 percent before trading down less than 0.1 percent. The Dubai Financial Market General Index dropped 1.3 percent, heading for the lowest closing level since March 2009, after Moody’s analyst Tristan Cooper said in an interview that the emirate’s state-owned companies may have to restructure more debt. The euro depreciated against nine of its 16 most-traded counterparts, falling 0.2 percent to $1.22030 against the dollar and weakening 0.6 percent to 111.21 per yen. The Greek 10-year yield difference, or spread, with bunds rose to 605 basis points, the highest since May 10, according to Bloomberg generic data. The bund yield was 2.64 percent. The cost of insuring against Greece defaulting on its debt rose, with credit-default swaps tied to the nation’s bonds climbing 37 basis points to 792, according to CMA DataVision. Greece, Spain and Portugal are cutting spending to tackle their budget deficits, which swelled as the recession crimped government tax revenue. Greek Prime Minister George Papandreou pledged to bring the deficit, which increased to 13.6 percent of gross domestic product last year, to 8.1 percent of GDP this year and to under the 3 percent European Union limit of 3 percent in 2014. Investor Confidence German investor confidence fell to 28.7 this month from 45.8 in May, lower than economists forecast, the ZEW Center for European Economic Research said today. Crude oil for July delivery climbed to $75.78 a barrel in electronic trading on the New York Mercantile Exchange. Copper for delivery in three months declined 0.2 percent to $6,650 a metric ton on the London Metal Exchange. Nickel dropped 1.5 percent to $19,996 a ton. Silver for immediate delivery climbed 0.6 percent to $18.33 an ounce, as some investors bought the metal as a cheaper alternative to gold as a hedge against declines in currencies. Gold was little changed at $1,222.05 an ounce. --With assistance from Claudia Carpenter, David Merritt, Michael Patterson, Daniel Tilles and Steve Voss. Editors: Stephen Kirkland, Paul Sillitoe To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; To contact the editor responsible for this story: Paul Sillitoe in London at psillitoe@bloomberg.net.

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