BS: Stocks, Commodities Extend Gains as Jobless Claims Drop
Global stocks climbed for the first time this week and commodities rallied as U.S. jobless claims slid to a four-year low and Italy’s bond yields fell after a debt sale. The dollar and U.S. Treasuries retreated.
The MSCI All-Country World Index (MXEF) advanced 0.6 percent at 10:26 a.m. in New York and the Standard & Poor’s 500 Index increased a similar amount. Italy’s 10-year bond yield dropped six basis points to 5.05 percent. The S&P GSCI gauge of raw materials added 1 percent as corn and soybeans led gains. The dollar weakened against 15 of 16 major peers while 10-year Treasury yields increased five basis points to 1.73 percent.
Global stocks and commodities extended gains as Labor Department data showed applications for jobless benefits unexpectedly fell by 30,000 to 339,000 last week, in a report which may reflect difficulty adjusting the data for seasonal swings at the start of a new quarter. Italy sold 3.75 billion euros ($4.8 billion) of benchmark three-year bonds at 2.86 percent and investors bid for 1.67 times the amount offered, up from 1.49 times last month.
“The economy is improving, we’re doing a better job,” Philip Orlando, the New York-based chief equity strategist at Federated Investors Inc., which oversees about $370 billion, said in a telephone interview. “I think we should be going faster but this is a phenomenal claims number. So now the question is, ‘Is this number real or is it going to get revised away next week?’”
Slump Halted
The S&P 500 rose for the first time in a week. Unemployment claims were forecast to increase to 370,000 last week from 367,000 the previous period, according to the median estimate in a Bloomberg survey of economists. One state accounted for most of the plunge in claims, a Labor Department spokesman said as the data were issued to the press.
Sprint Nextel Corp. jumped 13 percent as Japan’s Softbank Corp. was said to be in talks to buy control of the company. Bank of America Corp. and JPMorgan Chase & Co. paced gains among financial shares, which climbed the most out of 10 industries in the S&P 500.
The Stoxx Europe 600 Index (SXXP) snapped a three-day slump as luxury goods companies and retailers climbed. Burberry Group Plc, the U.K.’s largest luxury-goods maker, rallied 13 percent after reporting a partial recovery in retail sales growth since September’s profit warning. Christian Dior SA and Cie. Financiere Richemont SA rose more than 3 percent.
Carrefour SA (CA) climbed 4.1 percent in Paris after the world’s second-largest retailer posted third-quarter sales that beat analyst estimates. Direct Line Insurance Group Plc, a U.K. insurer, added 7 percent on the first day of trading following its 787 million-pound ($1.3 billion) initial public offering. Spanish bank Bankia SA dropped 1.7 percent.
European Yields
Spain’s two-year notes fell for a fourth day, with the yield rising two basis points to 3.28 percent. S&P yesterday cut Spain’s debt rating to one level above junk, citing economic and political risks as the government considers a second bailout.
German bunds erased gains after the U.S. jobless claims report, pushing the yield three basis points higher to 1.52 percent. Germany’s leading economic forecasters cut the country’s outlook for growth next year to 1 percent, half the rate of an estimate on April 19. Europe’s biggest economy is beginning to be hit by the debt crisis, said the group that includes Munich’s Ifo institute in its 86-page report.
Euro, Rand
The euro strengthened 0.5 percent to $1.2941 after weakening for three days. Australia’s dollar rallied for a fourth day, climbing 0.4 percent to $1.0275. The rand extended gains against the dollar amid signs labor unrest that shut gold and platinum mines is easing. The currency has gained 2 percent in three trading sessions.
Corn, oil, wheat and soybeans rallied more than 1 percent to lead gains in 17 of 24 commodities in the S&P GSCI Index. Oil in New York climbed 1.5 percent to $92.60 a barrel.
The MSCI Emerging Market Index added 0.4 percent, the first gain in four days.
South Korea’s KOSPI (KOSPI) fell 0.8 percent to its lowest level since Sept. 11, as the country’s central bank lowered the benchmark seven-day repurchase rate to 2.75 percent from 3 percent. The Bank of Korea slashed its 2012 economic growth outlook to 2.4 percent from an earlier estimate of 3 percent. Taiwan’s benchmark stock gauge slumped 1.9 percent, falling for a third day.
To contact the reporters on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net; Inyoung Hwang in New York at ihwang7@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
