BLBG: Stocks, U.S. Futures Climb on Stimulus Speculation; Yen Weakens
Aug. 9 (Bloomberg) -- Stocks climbed to a 12-week high and U.S. futures gained on speculation weaker jobs growth will prompt the Federal Reserve to extend efforts to shore up the economy. The yen weakened and copper rose.
The MSCI World Index of stocks in 24 developed nations advanced 0.3 percent at 10:04 a.m. in London, while futures on the Standard & Poor’s 500 Index rose 0.4 percent. The yen weakened against all but one of its 16 most-traded peers. Copper climbed for the first time in three days, rising 1.4 percent, while lead advanced 2.5 percent, the most in a week. The yield on the two-year Treasury note was at 0.51 percent, after falling below 0.5 percent for the first time on Aug. 6.
The Federal Reserve sets U.S. monetary policy this week. Three years ago today, the European Central Bank provided an unprecedented 95 billion euros ($126 billion) as the credit crisis made commercial banks unwilling to lend to each other. The unexpectedly steep drop in U.S. nonfarm payrolls reported last week, strengthened speculation that the Fed may announce more stimulus measures to boost growth.
“It’s a sign of how long this crisis has been reverberating around that we now enter a week that could see fresh quantitative easing from the Fed,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a report. “Bad news is interpreted as increasing the probability of imminent QE, a kind of win-win for risk assets.”
BP Gains
The Stoxx Europe 600 Index rallied 1.3 percent as more than 10 stocks rose for every one that fell and all 19 industry groups advanced. BP Plc rallied 2.5 percent for a sixth day of gains, the longest winning streak since before its Macondo well started leaking oil into the Gulf of Mexico in April. The well has now been effectively plugged with cement, BP said yesterday.
GDF Suez SA and International Power Plc rose more than 1 percent after people familiar with the matter said the companies are close to agreeing on a deal to combine assets. Rio Tinto Group led basic resources stocks to the biggest gains on the Stoxx 600, rising 2.1 percent.
The gain in U.S. futures indicated the S&P 500 may pare its 0.4 percent decline on Aug. 6. Of the 420 companies on the benchmark gauge that have reported quarterly results since July 12, about 77 percent have beaten analysts’ estimates for per- share profit, according to data compiled by Bloomberg.
Goldman on Japan
The MSCI Asia Pacific Index was little changed as Japanese stocks retreated on a reduced economic growth forecast from Goldman Sachs Group Inc. The MSCI Emerging Markets Index climbed 0.5 percent to 1,015.64, heading for the highest closing level since April 30. Russia’s Micex Index rose 0.8 percent, the biggest gain in a week, as shares of mining company OAO GMK Norilsk Nickel and crude producer OAO Lukoil advanced.
Copper for delivery in three months advanced $103 to $7,473 a metric ton on the London Metal Exchange. Lead climbed $54 to $2,215 a ton, on speculation of more demand for car batteries which contain lead. Crude oil for September delivery advanced 0.9 percent to $81.46 a barrel on the New York Mercantile Exchange, the first increase in four days.
The yen slipped 0.1 percent to 113.67 per euro and depreciated 0.1 percent to 85.6 versus the dollar. The dollar was little changed at $1.3288 against the euro.
To contact the reporter on this story: David Merritt in London on dmerritt1@bloomberg.net
