SF: U.S. Futures Rise on Earnings; Treasuries, Gold Gain
Sept. 17 (Bloomberg) -- Stocks rose in Europe and Asia and U.S. index futures gained after profit beat estimates at Research In Motion Ltd. and Oracle Corp. Equities trimmed their advance and Treasuries rose amid concern Ireland and Portugal may need financial assistance.
The MSCI World Index added less than 0.1 percent at 9:05 a.m. in New York, trimming a rally of as much as 0.6 percent. Futures on the Standard & Poor's 500 Index advanced 0.1 percent. The S&P GSCI Spot Index of raw materials climbed 0.4 percent, led by grains. Gold jumped to a record and the yield premium investors demand to own Irish 10-year government bonds instead of benchmark German bunds jumped to a record.
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 a rise in technology spending. European Central Bank council member Axel Weber said today that while the financial crisis is "still with us," the economy 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 gain in U.S. futures indicated the S&P 500 may extend its third straight weekly advance.
Technology Earnings
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 3.8 percent in pre-market trading. Oracle gained 4 percent.
The Stoxx Europe 600 Index advanced 0.3 percent, trimming an earlier 1.1 percent rally, and the MSCI Asia Pacific Index rose 1 percent. Carrefour SA, the world's second-largest retailer, jumped 4.6 percent as analysts praised the company's plan to revamp its superstore format in western Europe. STMicroelectronics NV, Europe's largest semiconductor maker, gained 2.7 percent. Invensys Plc rallied 3.8 percent after announcing an alliance with China's CSR Corp.
Corporate creditworthiness in Europe is the best ever compared with governments, credit-default swap prices show, as companies cut debt while governments struggle with budget deficits.
Crucell
Crucell NV soared 56 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 around the world so far this year, up from $1.25 trillion for the same period last year, according to data compiled by Bloomberg.
European equities and U.S. index futures trimmed gains as the spread between Irish and German 10-year bonds widened to 385 basis points and the Portugal-Germany spread rose to 364 basis points, or 3.64 percentage points.
Ireland may need to accept external assistance if there are additional financial-sector losses or the economy worsens, Barclays Plc said in a note to investors yesterday. Portugal may have to seek assistance from the International Monetary Fund to address the problems of external financing, Diario de Noticias reported on its website, citing three former finance ministers Eduardo Catroga, Medina Carreira and Miguel Beleza.
Sovereign, Corporate CDS
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.
Corn jumped 2.2 percent to $5.07 a bushel on the Chicago Board of Trade after Goldman Sachs Group Inc. raised its three- month forecast for the grain. Gold futures climbed as much as 0.8 percent to a record $1,284.40 an ounce and silver rose to within 1 cent of a 30-year high. Copper jumped more than 1 percent in London and New York. October crude oil slipped 0.1 percent to $74.48 a barrel in New York.
The MSCI Emerging Markets Index climbed 0.8 percent, with the MSCI China gauge gaining 1.3 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 euro slipped 0.1 percent to $1.3063, halting a four-day rally. The New Zealand dollar strengthened against all major peers, rising 0.7 percent to 73 U.S. cents.
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.
