BS: U.S. Futures Rise on Earnings; Metals Gain, Yen Weakens
Sept. 17 (Bloomberg) -- Stocks rose, sending the MSCI World Index to a four-month high, and U.S. index futures rallied after profit at Research In Motion Ltd. and Oracle Corp. beat analyst estimates. Commodities gained for the time in three days and the yen traded near a five-week low against the euro.
The MSCI World of stocks in 24 developed nations added 0.6 percent at 9:57 a.m. in London, its highest level since May 13. Futures on the Standard & Poor’s 500 Index advanced 0.9 percent. The S&P GSCI Spot Index of raw materials climbed 0.9 percent, led by grains. Gold jumped to a record. The yen weakened against all but one of its 16 most-traded counterparts.
Investors took on more risk as unexpectedly higher sales and earnings at Blackberry maker Research in Motion and the world’s second-largest software producer Oracle signaled an increase in technology spending. European Central Bank council member Axel Weber said today that while the financial crisis is “still with us,” the economic situation is in a “more relaxed situation.”
“The general tone of the market is quite positive and what corporate news that is out there is positive,” said London- based James Buckley, a fund manager at Baring Asset Management Ltd. who helps oversee $44 billion and is overweight technology shares. “The bias in the market is to the upside.”
The Stoxx Europe 600 Index rose 1.1 percent as all 19 industry groups advanced, while the MSCI Asia Pacific Index climbed 1 percent. Carrefour SA, the world’s second-largest retailer, jumped 6 percent as analysts praised the company’s plan to revamp its superstore format in western Europe. Invensys Plc rallied 5.3 percent after announcing an alliance with CSR Corp. of China. STMicroelectronics NV, Europe’s largest semiconductor maker, gained 2.8 percent.
Creditworthiness
Corporate creditworthiness in Europe is the best ever compared with governments as companies cut debt, credit-default swaps show.
Crucell NV soared 54 percent after Johnson & Johnson said it planned to offer 1.75 billion euros ($2.3 billion) to take full control of the vaccine maker. A total of $1.43 trillion of deals has been announced so far this year, up from $1.25 trillion for the same period last year, according to data compiled by Bloomberg.
The gain in U.S. futures indicated the S&P 500 may extend its third straight weekly advance. Research In Motion reported second-quarter revenue and profit that beat analysts’ estimates on rising demand for phones that can access the Web and manage e-mail. Oracle also beat estimates as sales of database software and Sun Microsystems Inc. server computers helped it capitalize on a recovery in information-technology spending. Research In Motion rose 5.4 percent in Germany. Oracle gained 4.2 percent.
U.S. Inflation
The cost of living in the U.S. probably increased in August for a second month, easing concern that the cooling economy will cause a protracted drop in prices, economists said before a report today. The consumer-price index added 0.3 percent for a second month, according to the median forecast of 77 economists surveyed before the Labor Department figures at 8:30 a.m. in Washington. Separate figures may show consumer confidence climbed in early September.
Corn jumped 3 percent to $5.11 a bushel on the Chicago Board of Trade after Goldman Sachs Group Inc. raised its three- month forecast for the grain. Gold climbed as much as 0.6 percent to a record $1,282.97 an ounce and silver rose to within 1 cent of a 30-year high. Copper jumped 1.3 percent. October crude oil gained 0.6 percent to $75.02 a barrel in electronic trading on the New York Mercantile Exchange.
Emerging Markets
The MSCI Emerging Markets Index climbed 0.9 percent, with the MSCI China gauge gaining 1.3 percent. Benchmark indexes in Indonesia, Hungary and South Africa rose at least 0.9 percent. Flows into emerging-market equity funds and high-yield bonds reached a six-week high in the week to Sept. 15 on optimism the global rally will be sustained, EPFR Global said in an e-mailed statement.
The yen fell for a sixth day against the euro as the prospect of further currency sales by the Bank of Japan hung over the market. The yen depreciated 0.6 percent to 112.85 per euro, the weakest level since Aug. 10, and traded at 85.86 per dollar from 85.78.
Luxembourg Prime Minister Jean-Claude Juncker said yesterday in an interview that euro-region nations aren’t happy about Japan’s unilateral yen intervention.
The euro climbed for a fifth day versus the dollar, adding 0.5 percent to $1.3142, the most since Aug. 11. The New Zealand dollar strengthened the most against the dollar among its most- traded peers, adding 1.2 percent to 73.26 U.S. cents.
Yuan Rallies
China’s yuan was set for its biggest weekly advance in 28 months on speculation a faster pace of appreciation will be tolerated after U.S. Treasury Secretary Timothy F. Geithner called for “significant” gains. The central bank set the reference rate at 6.7172 per dollar today, the strongest level since July 2005.
The yield on the two-year German note climbed 2 basis points to 0.83 percent, the most since July 29. The 10-year yield was 1 basis point higher at 2.49 percent. U.S. 10-year Treasury yields were 2 basis points higher at 2.78 percent, widening the spread with two-year yields by 1 basis point to 230 basis points, the most since Aug. 9.
The difference between the Markit iTraxx Europe Index of corporate credit-default swaps and the Markit iTraxx SovX Western Europe Index of contracts tied to government debt widened 1 basis point to a record 49, according to data from CMA and JPMorgan Chase & Co.
Developed Markets View: {DMMV } Emerging Markets View: {EMMV } Stock Market Map: {IMAP G } World Equity Markets: {WEI } World Bond Markets: {WB } Pipeline of Bonds: {PREL } World Currency Ranker: {WCRS } Commodity Ranked Returns: {CRR } Credit-Default Swap Indexes: {MKIT } World Trends and Reversals: {WTR } Graphing: {GRAPH }
--With assistance from Matthew Brown, Claudia Carpenter, David Merritt, Abigail Moses and Steve Voss in London. Editors: Stephen Kirkland, Stuart Wallace
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
