By Justin Carrigan and Daniel Hauck July 17 (Bloomberg) -- The yen rose as bomb blasts in Indonesia sapped investors’ appetite for higher-yielding currencies. Stocks climbed after International Business Machines Corp. raised its earnings forecast. The Japanese currency rose 0.9 percent against the Indonesian rupiah as of 10:03 a.m. in London and advanced 0.8 percent against the Australian dollar. The MSCI World Index of 23 developed nations added 0.2 percent, the first five-day gain since May. Investors sought the perceived safety of the yen after explosions at two Jakarta hotels killed at least nine people. The MSCI World has surged 6.7 percent this week, the most since March, as forecasts from IBM and Intel Corp. exceeded analysts’ estimates and earnings at Goldman Sachs Group Inc. and Johnson & Johnson beat projections. Nouriel Roubini, the New York University economist who predicted the credit crisis, reiterated yesterday the U.S. recession may be over by the end of the year. “Investors have looked at the events in Indonesia and decided that’s a good reason to take profits on what has been a fairly bullish week in terms of risk tolerance,” said Simon Derrick, chief currency strategist in London at Bank of New York Mellon Corp., the world’s biggest custodian of financial assets. The yen rose against 15 of the 16 most-traded currencies, strengthening to 93.63 per dollar and 131.98 per euro. Treasuries rose for a second day, sending the 10-year note’s yield down two basis points to 3.55 percent, on concern CIT Group Inc., the U.S. commercial lender that failed to get a federal guarantee for its bonds, will file for bankruptcy. European Stocks Europe’s Dow Jones Stoxx 600 Index rose 0.4 percent, bringing its weekly gain to 7 percent, the biggest since November. Sandvik AB, the world’s largest maker of metal-cutting tools, led the advance, surging 6.6 percent in Stockholm after reporting an operating loss that was smaller than the company predicted last month. IBM advanced 1.2 percent in Germany. The world’s biggest computer-services provider posted second-quarter earnings that beat analysts’ estimates after the close of U.S. trading yesterday. Bank of America Corp., Citigroup Inc. and General Electric Co. are scheduled to report results today. Profits fell an average 35 percent at Standard & Poor’s 500 Index companies in the second quarter and will drop 21 percent from July through September, according to analyst projections compiled by Bloomberg. That would extend the streak of quarterly profit declines to a record nine, Bloomberg data show. CIT Talks Futures on the Standard & Poor’s 500 Index were little changed, as CIT said it’s in talks with potential lenders to secure funding. CIT may need as much as $6 billion to avoid filing for bankruptcy protection after the U.S. wouldn’t give the firm a second bailout, according to CreditSights Inc. The MSCI Emerging Markets Index rose for a fourth day, gaining 1 percent to the highest level since June 15, as stocks advanced from Russia to India. The 22-country benchmark has climbed 6.2 percent this week, poised for the best weekly gain in more than two months. The Indonesian rupiah declined the most in two weeks after the bombings, while the nation’s stocks and bonds slid. Indonesia went ahead with a 35 billion-yen ($374 million) sale of 10-year samurai bonds, a banker involved in the deal said. The offering was the first by a nation in the samurai market since the collapse of Lehman Brothers Holdings Inc. in September. Hungary’s government sold 1 billion euros ($1.4 billion) of bonds in its first international debt offering in more than a year, a banker involved in the deal said. Emerging-market bond investors have recovered all their losses from the worst financial crisis since the Great Depression. JPMorgan Chase & Co.’s EMBI+ Index, which tracks total returns on the foreign-currency debt of developing nations, rose to 444.37 yesterday, the highest since the index began in December 1993. The gauge had dropped as much as 30 percent from May through October. Crude oil for August delivery fell 0.4 percent to $61.80 a barrel on the New York Mercantile Exchange, snapping two days of gains. To contact the reporters on this story: Justin Carrigan in London at jcarrigan@bloomberg.net; Daniel Hauck in London at dhauck1@bloomberg.net

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