BLBG:Stocks Rise With Euro as U.S. Futures Gain Before Jobs
Stocks (MXWD) rose to a four-month high and the euro strengthened as plans to contain the credit crisis spurred a rally in bonds of Europe’s most-indebted countries. U.S. equity-index futures advanced before a report on payrolls.
The MSCI All-Country World Index added 0.7 percent at 8:15 a.m. in New York. Standard & Poor’s 500 Index futures gained 0.4 percent after the U.S. gauge closed yesterday at a 4 1/2-year high. The Shanghai Composite Index (SHCOMP) rose 3.7 percent on plans to build roads. The euro advanced 0.6 percent to $1.2708. Spain’s 10-year bond yield slid below 6 percent for the first time since May 25 and similar-maturity Italian rates fell for a fifth day. Copper jumped 2.1 percent and nickel climbed 1.4 percent.
Yields on Spanish and Italian 10-year notes are headed for the steepest weekly drop in at least a year and default risk tumbled after European Central Bank President Mario Draghi said policy makers agreed to an unlimited bond-buying program for struggling nations. The Labor Department is set to release August payrolls data after reports this week showed companies added more workers than forecast and jobless claims fell.
“With the ECB and Draghi out of the way we are left with non-farm payrolls as the final key event for the week,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a report. “A good report will perhaps add further fuel to the current risk-on mood while a sharply weaker report will probably re-ignite the quantitative-easing debate.”
The Stoxx Europe 600 Index (SXXP) rose 0.5 percent, on course for the highest close in 14 months. The volume of shares changing hands on the Stoxx 600 was more than double the average of the last 30 days, data compiled by Bloomberg show. A measure of banks led gains, with Portugal’s Banco Espirito Santo SA surging 8.7 percent and Germany’s Commerzbank AG rising 6.6 percent.
Xstrata Rallies
Xstrata Plc (XTA) rallied 7.8 percent. Glencore International Plc, the world’s biggest publicly traded commodities supplier, raised its proposed takeover bid for the mining company. Glencore shares fell 3.9 percent.
The increase in S&P 500 futures suggested the U.S. gauge will extend the highest level since January 2008. Payrolls probably increased by 130,000 workers in August, according to the median forecast of 92 economists surveyed by Bloomberg. Employers took on 163,000 people in July. The unemployment rate probably held at 8.3 percent, economists projected.
Intel Corp., the world’s largest semiconductor maker, fell 2.4 percent in pre-market trading after cutting its third- quarter revenue forecast.
The 10-year U.S. Treasury yield rose five basis points to 1.73 percent, the highest since Aug. 21 on a closing basis.
The euro climbed to 100 yen for the first time since July 5, while the Swiss franc weakened to the least in almost six months against the 17-nation currency.
Spread Narrows
The extra yield investors demand to hold Spanish 10-year bonds instead of German bunds, Europe’s benchmark government securities, fell to the least since May 4. The rate on Germany’s two-year note was positive for the second straight day, climbing three basis points to 0.06 percent.
Credit-default swaps tied to Spain’s debt fell 58 basis points to 338, the lowest since October, while Italy declined 45 basis points to 309, the lowest since Aug. 1, 2011. The Markit iTraxx SovX Western Europe Index of credit-default swaps tied to the debt of 15 governments fell for a sixth day, declining 16 basis points to 195.
German industrial production unexpectedly rose in July as output of investment goods increased, the Economy Ministry in Berlin said today.
Copper gained as much as 2.3 percent to the highest since May 14 as China approved plans to build 2,018 kilometers (1,254 miles) of roads. The country is the biggest buyer of the metal. Gold dropped 0.3 percent to $1,695.10 an ounce and silver slumped 1.1 percent.
The MSCI Emerging Markets Index (MXEF) climbed 1.8 percent, the most in six weeks. South Korea’s Kospi (KOSPI) index jumped 2.6 percent after Fitch Ratings upgraded the country’s debt. India’s Sensex jumped 2 percent and benchmark gauges in Russia, Poland, Hungary and the Czech Republic rose more than 1 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
