By Justin Carrigan and Daniel Hauck July 16 (Bloomberg) -- Stocks in Europe and Asia advanced and U.S. index futures pared declines as JPMorgan Chase & Co. posted results that exceeded analysts’ estimates. The yen strengthened against higher-yielding currencies after CIT Group Inc. said it probably won’t get federal aid. Europe’s Dow Jones Stoxx 600 Index climbed for a fourth day, gaining 0.4 percent at 12:24 p.m. in London, while futures on the Standard & Poor’s 500 Index slipped 0.2 percent after earlier falling 0.7 percent. The yen rose more than 0.8 percent against the Swedish krona and the New Zealand dollar. CIT’s distress signaled more pain for financial companies that have already reported almost $1.5 trillion in losses and credit-market writedowns since the start of 2007. Stocks rallied after China said its economy expanded 7.9 percent in the second quarter and JPMorgan posted a 36 percent increase in profit as investment-banking fees rose to a record. JPMorgan “is a positive signal,” said Lionel Heurtin, a fund manager at Ofi Asset Management in Paris, which oversees $24 billion. “Banks are heavyweights in the indexes and the economy, so JPMorgan’s report has reassured investors.” Treasuries pared their advance on the earnings report. Bonds had earlier climbed after New York-based CIT, which took $2.33 billion of aid in December, said yesterday that talks with regulators have broken off and “there is no appreciable likelihood of additional government support.” Google, IBM JPMorgan added 0.9 percent at $36.60 in pre-market New York trading. The second-largest U.S. bank said second-quarter earnings increased to $2.7 billion, or 28 cents a share. The average estimate of 14 analysts surveyed by Bloomberg was 5 cents a share, including costs to repay government bailout funds and an assessment by the Federal Deposit Insurance Corp. The S&P 500 has surged 6.1 percent this week as companies from Goldman Sachs Group Inc. to Johnson & Johnson reported profits that beat analysts’ estimates and Intel Corp. forecast sales that exceeded projections. Google Inc. and International Business Machines Corp. will post earnings today after the U.S. market’s close. Data on U.S. jobless claims may show the number of Americans filing for unemployment benefits fell to 553,000 last week, according to the median estimate of 41 economists surveyed by Bloomberg. That would be the lowest level since January. Nokia Oyj, the world’s biggest maker of mobile phones, tumbled 9.7 percent after saying market share will be flat this year. Electrolux AB rallied 9.2 percent after the world’s second-largest appliance maker posted profit that beat analysts’ estimates. China GDP Developing-nation stocks rose, sending the MSCI Emerging Markets Index to its best three-day gain in almost two months, as China’s report on gross domestic product boosted industrial companies. The MSCI index climbed 0.7 percent. The Dubai Financial Market General Index added 1.5 percent after the United Arab Emirates central bank said it may buy more bonds from Dubai. Crude oil for August delivery fell 1.1 percent to $60.89 a barrel on the New York Mercantile Exchange, after surging 3.4 percent yesterday. The New Zealand dollar dropped 0.8 percent against the dollar, the most in more than a week, after Fitch downgraded the outlook on the country’s debt rating to “negative,” citing the nation’s current account deficit. Credit-default swaps rose for the first day this week, signaling deteriorating perceptions of credit quality, with the high-yield Markit iTraxx Crossover Index climbing 18 basis points to 732, according to JPMorgan prices. The derivatives, which are used to hedge against losses and speculate on companies’ credit, contributed to the failures last year of Lehman Brothers Holdings Inc. and American International Group Inc. and the seizure in credit markets. CIT Debt The cost of protecting CIT debt from default rose as much as 2 percentage points to 36 percent, or $3.6 million, upfront and $500,000 dollars a year, according to CMA DataVision prices for credit-default swaps. A contract insures $10 million of debt for five years. A bankruptcy filing by CIT would be the first by a company that took money from the Troubled Asset Relief Program, the Treasury’s $700 billion fund designed to keep lenders solvent by investing the public’s money in the financial industry. CIT’s collapse would be the biggest bank failure measured by assets since regulators seized Washington Mutual Inc. in September. CIT reported $3 billion in deposits at the end of the first quarter. To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net

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