By Stephen Kirkland Sept. 9 (Bloomberg) -- Stocks rose to a four-month high in Europe and U.S. futures advanced after the Federal Reserve indicated the American economy is avoiding a recessionary relapse. The Australian dollar strengthened and oil rallied. The Stoxx Europe 600 Index gained 0.4 percent at 10:54 a.m. in London, while the MSCI Asia Pacific Index jumped 0.9 percent. Futures on the Standard & Poor’s 500 Index increased 0.3 percent. The Australian dollar appreciated against all 16 of its most-traded peers, and oil climbed 0.4 percent. The Fed said yesterday the U.S. economy maintained its expansion while showing “widespread signs of a deceleration” in mid-July through the end of August. European Central Bank council member Erkki Liikanen said a double dip in the global economy is “not likely.” The Bank of England will probably keep its expansion of stimulus measures on hold after a policy decision today. “Some of the extreme bearishness of the past few weeks has been flowing out,” said Stephen Halmarick, who helps manage about $135 billion as head of investment-markets research at Colonial First State Global Asset Management in Sydney. The MSCI World Index of stocks in 24 developed nations gained 0.2 percent. National Australia Bank Ltd. rallied 3.7 percent on optimism it won’t need to raise capital to finance a takeover. SM Prime Holdings Inc., the Philippines’ biggest shopping-mall operator, jumped 9.7 percent after the nation’s exports increased. Daimler, Home Retail More than three shares rose for every one that fell in Europe’s Stoxx 600. Daimler AG led carmakers higher, advancing 1.5 percent as Credit Suisse Group AG lifted its per-share earnings estimate. Home Retail Group Plc retreated 3 percent after forecasting profit at the bottom end of estimates. The increase in U.S. futures indicated the S&P 500 may extend yesterday’s 0.6 percent rally. Initial jobless claims probably dropped by 2,000 to 470,000 last week, according to the median projection in a Bloomberg survey before a Labor Department report today. Separate data may show the U.S. trade deficit narrowed in July, according to a Bloomberg survey. Both sets of figures are due for release at 8:30 a.m. in Washington. Australia’s dollar appreciated 0.7 percent to 92.45 U.S. cents and climbed 0.5 percent to 77.37 yen. The nation’s employers added 30,900 workers in August, exceeding the median forecast for 25,000 in a Bloomberg News survey of 25 economists, the statistics bureau said in Sydney today. The euro slipped 0.2 percent to $1.2698 and weakened 0.4 percent to 106.28 yen. The dollar retreated 0.2 percent to 83.75 yen. The pound declined against all 16 of its most-actively traded counterparts, weakening 0.5 percent to $1.5394, as government statistics showed the U.K. trade deficit widened to a record in July. Oil, Rubber Crude oil for October delivery rose to $74.96 a barrel in New York trading. Rubber, copper, zinc, soybeans and sugar slipped on Chinese exchanges after the Securities Times said regulators are investigating large positions in rubber futures. An official at the China Securities Regulatory Commission declined to comment. Copper for delivery in three months fell 1.2 percent on the London Metal Exchange. Aluminum, zinc and lead also dropped. Treasuries pared their gains, with the 10-year note yield at 2.66 percent, up from 2.62 percent earlier. The 30-year bond yield was little changed at 3.74 percent before the government sells $13 billion of the securities, the third of three auctions this week totaling $67 billion. Ireland Risk The cost of insuring Irish sovereign and financial-company bonds from default rose on concern that the cost of bailing out the nation’s banking system will harm the economy. Credit- default swaps tied to Anglo Irish Bank Corp.’s senior debt climbed 3.5 basis points to 799.5, implying a 50 percent chance of default within five years, according to data provider CMA. Contracts on Allied Irish Banks Plc jumped 12.5 basis points to 496. Bank of Ireland increased 3 basis points to 397. Swaps tied to Ireland’s government bonds climbed 14 basis points to 385. The MSCI Emerging Markets Index advanced 0.2 percent. The Philippine Stock Exchange gained for an eighth day and closed up 2.6 percent at an all-time high. China’s Shanghai Composite Index dropped 1.4 percent, the most in two weeks, as increasing property prices fueled concern the government will step up measures to curb speculation. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net

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