European stocks erased earlier losses and U.S. futures climbed as results from Google Inc. (GOOG) and Citigroup Inc. (C) helped allay concern stress tests will show banks don’t have enough capital. The cost of insuring government debt rose to a record. The Stoxx Europe 600 Index rose 0.1 percent at 9:11 a.m. in New York, after declines of as much as 0.8 percent. Standard & Poor’s 500 Index futures added 0.5 percent. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments jumped as much as 10 basis points to an all-time high of 292. Greek two-year bonds tumbled, driving the yield to a record 34 percent, and the 10-year German bond yield fell three basis points. Cotton sank 4.4 percent. The European Banking Authority will publish the results today of stress tests on 91 lenders, detailing their holdings in debt-ridden nations such as Greece and Italy. S&P signaled yesterday the U.S. may lose its AAA rating even if the government raises its debt ceiling. Manufacturing in the New York region unexpectedly contracted for a second straight month in July, according to Federal Reserve data. “We got some good earnings news on individual companies," Jeffrey Coons, president of Manning & Napier Advisors Inc. in Fairport, New York, said in a telephone interview. His firm manages $44 billion. ‘‘There’s a lot more company-specific issues driving stocks now, even though there’s still macro uncertainty about the debt negotiations in Washington and the European crisis.” The Stoxx 600 has fallen 2.4 percent this week, the biggest drop since March 18. Temenos Group AG plunged 18 percent in Zurich after the banking-software provider cut its license- revenue forecast. SGS AG, the world’s largest goods-inspection company, sank 7 percent as results missed analysts’ estimates. Petrohawk, Google The S&P 500 is on course for the biggest weekly decline in 11 months. Google, owner of the Internet’s most popular search engine, rallied 13 percent after saying quarterly sales were $6.92 billion, 5.3 percent above analyst estimates. Citigroup, the third biggest U.S. bank, climbed 2.9 percent after profit rose 25 percent, beating forecasts. The consumer-price index decreased 0.2 percent, compared with the 0.1 percent drop median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. The so-called core measure, which excludes more volatile food and energy costs, climbed 0.3 percent for a second month, more than forecast and the biggest back-to-back gain in three years. The Federal Reserve Bank of New York’s general economic index was minus 3.8, less than the most pessimistic forecast in a Bloomberg News survey, from minus 7.8 the prior month. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

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