BLBG:Stocks Rise With U.S. Futures on Signs of U.S. Recovery; Commodities Gain
Stocks rose for a fourth day, U.S. equity-index futures rallied and the dollar fell on signs the world’s largest economy is recovering and as takeovers increased. Commodities climbed as oil headed for the biggest weekly gain in almost two months.
The MSCI All Country World Index advanced 0.4 percent at 8:45 a.m. in London, set for the longest winning streak since Dec. 5. Standard & Poor’s 500 Index futures increased 0.5 percent and Treasury 10-year yields climbed one basis point. The Dollar Index slid 0.2 percent, while South Korea’s won strengthened 0.5 percent. Oil was up a fifth day in New York and copper added 0.9 percent in London.
Reports today are forecast to show U.S. personal spending, durable-goods orders and new home sales rose in November, after data showed a drop in jobless claims yesterday. House Speaker John Boehner agreed to a two-month extension of a payroll tax cut. Australia’s Gloucester Coal (GCL) Ltd. and EDP-Energias de Portugal SA climbed following offers from Chinese companies, while Wavin NV (WAVIN) jumped after Mexichem SAB increased its bid for the Dutch manufacturer.
“It’s encouraging that the U.S. economy is improving,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “Asset prices can probably go further despite this fairly benign economic environment.”
The Stoxx Europe 600 Index rose 0.7 percent, taking its weekly advance to 3.3 percent. EDP rallied 2.8 percent after China Three Gorges Corp. said it will pay 2.69 billion euros ($3.5 billion) for a 21 percent stake. Wavin jumped 18 percent.
Asian Shares
The MSCI Asia Pacific excluding Japan index added 1.4 percent. Australia’s S&P/ASX 200 Index rose 1.2 percent as Gloucester Coal surged 22 percent after China’s Yanzhou Coal (1171) agreed to buy the Sydney-based company for A$2.1 billion ($2.13 billion) in cash and shares. Yanzhou Coal jumped 6.6 percent in Hong Kong.
Gemdale Corp. (600383) rallied 3.1 percent, helping the Shanghai Composite to its first gain this week. The Beijing government said it won’t impose property price caps and the Xinkuai newspaper reported a city in Guangdong province may allow home price restrictions to expire.
S&P 500 futures expiring in March signal the U.S. stock gauge may climb for a fourth day. Durable goods orders probably rose 2.2 percent in November, while personal spending may have increased 0.3 percent, according to the median forecasts of economists surveyed by Bloomberg. New home sales may have climbed to 315,000 last month from 307,000, the surveys show.
Signs of Strength
New unemployment claims fell by 4,000 to 364,000 in the week ended Dec. 17, the lowest level since April 2008, Labor Department figures showed yesterday. Treasury 10-year yields rose to 1.96 percent.
“We’re seeing some signs of strengthening,” Michael Cuggino, president of Pacific Heights Asset Management LLC, said in a Bloomberg Television interview from San Francisco. “I’m cautiously optimistic.”
The dollar headed for weekly declines against 14 of its 16 major peers. The currency fell to 78.04 yen and weakened 0.2 percent to $1.3078 against the euro.
The won rose to 1,150.20 against the dollar, taking its gain for the week to 0.7 percent. Moody’s Investors Service said the outlook for South Korea’s ratings remains stable after the death of Kim Jong Il.
“Investment sentiment is improving after U.S. data sent some signals that the world’s largest economy is holding out well,” said Hwang Sun Min, a currency dealer in Seoul at Kookmin Bank, Korea’s largest lender. “Moody’s confirmation of sovereign ratings is also helping push the won higher.”
Stability Restored
The Bank of Korea and Finance Ministry said today in a joint statement after a meeting in Seoul that they will try to reduce the won’s volatility and expand trade financing for exporters so that they can cope with the global economic slowdown. Financial markets have restored stability after Kim Jong Il’s death, according to the statement.
Oil futures in New York rose as much as 0.7 percent to $100.23 a barrel. Futures have jumped 6.7 percent this week, set for the largest increase since the five days ended Oct. 28. Copper in London gained 0.9 percent to $7,611 a metric ton, climbing for a fourth day, the longest increase since October. The metal is poised for a 3.5 percent rise this week, the first increase in three weeks.
The cost of protecting Australian corporate bonds from default declined, with the Markit iTraxx Australia index falling two basis points to 182 basis points, according to Australia & New Zealand Banking Group Ltd. The gauge had risen 81 basis points this year as of yesterday, CMA prices show.
To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
