March 28 (Bloomberg) -- Treasuries fell while stocks and U.S. futures gained, signaling the Standard & Poor's 500 Index will extend the biggest weekly rally in almost two months, as consumer spending rose and a Federal Reserve official said the economy may be strong enough to consider an end to stimulus. The five-year Treasury note yield increased for an eighth day, jumping five basis points at 9:05 a.m. in New York. Portugal's 10-year bond yield climbed to a euro-era record. The Australian dollar strengthened to the highest level since it began trading freely in 1983, while the yen fell against 15 of its 16 peers. S&P 500 Index futures rose 0.2 percent and the Stoxx Europe 600 Index gained 0.3 percent. The S&P GSCI index of 24 raw materials sank 1 percent and oil retreated 1.6 percent. American consumer spending rose more than forecast in February, the Commerce Department said. Policy makers should review halting the $600 billion of asset purchases due to end in June because the economy may not require that much stimulus, Fed Bank of St. Louis President James Bullard said on March 26. European Central Bank council member Ewald Nowotny said he expects "normalization" in policy regarding interest rates and liquidity measures, ORF Austrian Television reported yesterday. "The three- to six-month outlook for the global economy remains pretty decent, thus helping risk assets ride the likely volatility," Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a research note. "Comments by Fed officials are reminders for markets to start pondering the world, post liquidity withdrawal." $35 Billion Auction The five-year Treasury note's run of declines was the longest since April 2008, while the yield on the 10-year security increased three basis points today to 3.47 percent. The government plans to sell $35 billion of two-year notes today, the first of three auctions this week totaling $99 billion. Fed speakers include Atlanta's Dennis Lockhart, Chicago President Charles Evans and Eric Rosengren of the Boston Fed. Portuguese bonds declined, with the 10-year yield advancing eight basis points to 7.87 percent. Europe's biggest banks are selling their holdings of Portuguese debt, reducing risk as they prepare for stress testing, the Sunday Times reported yesterday, citing people familiar with the matter. The gain in S&P 500 futures indicated a fourth straight increase for the U.S. stocks gauge, which rallied 2.7 percent last week. Consumer purchases increased 0.7 percent, the most since October, after advancing 0.3 percent the prior month, Commerce Department figures showed. The median estimate of 71 economists surveyed by Bloomberg News called for a 0.5 percent advance. A separate report may indicate the number of contracts signed to buy houses stalled last month. Alcatel-Lucent, Tepco Three stocks rose for every two that fell in Europe's Stoxx 600 after the gauge rallied the most in six months last week. Alcatel-Lucent SA jumped 7.4 percent and Nokia Oyj rose 3.1 percent as Goldman Sachs Group Inc. recommended the shares. Porsche SE fell 2.9 percent after saying it will start a 5 billion-euro ($7 billion) share sale this week. The MSCI Asia Pacific Index fell for the first time in three days, losing 0.5 percent. Tokyo Electric Power Co., known as Tepco, dropped 18 percent to its lowest level since 1977 after saying radiation at its Fukushima Dai-Ichi nuclear plant's No. 2 reactor was 100,000 times the normal level. The Australian dollar strengthened as much as 0.5 percent to $1.0315, while the yen depreciated 0.5 percent against the dollar. The euro slipped 0.2 percent versus the U.S. currency, weakening against most of its major peers. The pound fell 0.4 percent per dollar, on course to close below $1.60 for the first time since Jan. 28, after a Lloyds Banking Group Plc report showed U.K. business confidence slid in March to the lowest in two years. Cotton declined 3 percent and copper retreated 1.4 percent. Crude for May delivery fell to $103.74 a barrel in electronic trading on the New York Mercantile Exchange. Libyan rebels recaptured the oil ports of Ras Lanuf and Brega as NATO airstrikes targeted Sirte, the hometown of Muammar Qaddafi. India's Bombay Stock Exchange Sensitive Index gained 0.7 percent, extending the biggest weekly rally in 20 months, as lower oil prices eased inflation concerns. --With assistance from Claudia Carpenter, Mark Gilbert, Michael Patterson, Andrew Rummer and Dan Tilles in London. Editors: Stephen Kirkland, Justin Carrigan, Michael Regan

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