U.S. and European stocks rallied for a fourth straight day and Treasury two-year yields posted a sixth consecutive gain as Americans’ consumer spending rose more than forecast and pending home sales unexpectedly increased. The euro erased losses versus the dollar. The Standard & Poor’s 500 Index rose 0.2 percent to 1,316.88 and the Stoxx Europe 600 Index gained 0.1 percent at 11:08 a.m. in New York. Two-year Treasury yields climbed three basis points to 0.76 percent. The euro appreciated 0.1 percent to $1.4104, after falling 0.5 percent, as European Central Bank President Jean-Claude Trichet said inflation rates that stay above 2 percent would be a concern. Portugal’s 10-year bond yield climbed to a euro-era record of 7.94 percent. Consumer spending rose 0.7 percent in the U.S. during February, beating the median economist estimate that called for a 0.5 percent gain. An index of pending home resales increased 2.1 percent, while economists surveyed by Bloomberg projected no change. Federal Reserve Bank of St. Louis President James Bullard said the economy may be strong enough to consider an end to stimulus. “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.” To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net. To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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