By Rita Nazareth June 9 (Bloomberg) -- U.S. stocks advanced, snapping a six- day decline, as the trade deficit unexpectedly narrowed amid record exports and consumer confidence improved. Raw material and energy shares led the gains in the Standard & Poor’s 500 Index on expectations for stronger demand for commodities. Mosaic Co. and CF Industries Holdings Inc. paced gains among fertilizer producers, rallying at least 3.9 percent, after the government reduced its corn-crop estimate. American International Group Inc. increased 2.6 percent as Deutsche Bank AG recommended buying the shares. The S&P 500 advanced 0.8 percent to 1,289.99 at 10:37 a.m. in New York. The benchmark gauge for American equities yesterday retreated to 12.1 times its companies’ forecast operating earnings, the cheapest valuation since August, according to data compiled by Bloomberg. The Dow Jones Industrial Average increased 86.05 points, or 0.7 percent, to 12,134.99 today. “We’re due for a rally after miserable stock performance,” said John Carey, a Boston-based money manager at Pioneer Investments, which oversees about $250 billion. “People have been focusing on the negatives and have not been emphasizing the earnings momentum. Some stocks present good values again. It’s a good environment for investors to be positioning themselves.” The S&P 500 yesterday completed its longest slump since February 2009 on concern the economy is slowing. A report last week showed that payrolls grew at the slowest pace in eight months. The benchmark equity index doubled from its March 2009 low to 1,363.61 on April 29, its highest level since June 5, 2008, as earnings topped estimates for nine straight quarters. Trade Deficit Narrows Stocks rose as a report showed that the U.S. trade deficit unexpectedly narrowed in April, reflecting a plunge in auto and oil imports combined with record exports. The gap shrank 6.7 percent to $43.7 billion, the lowest since December, Commerce Department figures showed. A separate report showed that consumer confidence rose last week for the third consecutive time as lower gasoline prices lifted Americans’ outlook on their finances. The Bloomberg Consumer Comfort Index climbed to minus 45.9 in the period to June 5, the best showing since the end of April, from the prior week’s minus 47.1. Across income groups, sentiment improved the most among those making less than $50,000 a year. Benchmark indexes advanced even as initial jobless claims unexpectedly rose by 1,000 to 427,000 last week, the Labor Department said. Economists surveyed by Bloomberg News projected a drop to 419,000, according to the median forecast. Commodity Producers Rally Gauges of raw material and energy shares led the gains in the S&P 500 within 10 industries as commodity prices rallied. The Thomson Reuters/Jefferies CRB Index of 19 raw materials gained 0.7 percent, rising a third day. Schlumberger Ltd., the world’s largest oilfield services provider, climbed 2 percent to $85.36. Freeport-McMoRan Copper & Gold Inc. increased 1.2 percent to $49.38. Fertilizer stocks rose as the government said that the U.S. corn harvest may be 2.3 percent smaller than forecast in May as farmers reduced acreage because of excessive Midwest rains. Mosaic, North America’s second-largest fertilizer producer, gained 3.9 percent to $68.20. CF Industries increased 4.3 percent to $154.99. AIG advanced 2.6 percent to $28.04. Deutsche Bank recommended buying the shares of the insurer, saying that earnings consistency should drive the stock higher. Macy’s Inc. gained 0.8 percent to $28.05. The second- biggest U.S. department-store chain was raised to “overweight” from “equal weight” at Barclays. The share-price estimate is $35. --Editors: Michael Regan, Joanna Ossinger To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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