BLBG: Global Stocks Advance After Dow Record as Spanish Bonds Climb
Global stocks rose to the highest in more than 4 1/2 years after improved U.S. service-industry data drove the Dow Jones Industrial Average to a record. Spain’s 10- year bonds advanced for a sixth day.
The MSCI All-Country World Index (MXWD) increased for a third day, rising 0.3 percent at 12:05 p.m. in London, heading for the highest close since June 2008. The Stoxx Europe 600 Index climbed 0.2 percent while futures contracts on Standard & Poor’s 500 Index gained 0.3 percent. Spanish 10-year borrowing costs dropped six basis points to 4.97 percent. The Swiss franc slid versus all of its 16 major peers. Venezuelan bonds fell for a second day and Kenya’s shilling weakened 1.2 percent.
The Standard & Poor’s 500 Index is within 1.7 percent of a record after the Dow’s move yesterday erased losses from the financial crisis. Gross domestic product in the 17-nation euro bloc fell 0.6 percent in the fourth quarter, the European Union’s statistics office said today, confirming an initial Feb. 14 estimate. A private jobs report in the U.S. is forecast to show companies added positions.
“The good news is we do not seem to be anywhere close to the kind of cyclical turning point we were on the cusp of in October 2007, suggesting the stock market may have more room to run,” Julia Coronado, chief North America economist for BNP Paribas SA in New York, wrote in a report. “However, the bad news is that we do not have anything like the kind of robust growth dynamic that had led us to a cyclical peak.”
Sharp Jump
The Stoxx 600 (SXXP) extended a 4 1/2-year high as three shares advanced for every two that fell. Vodafone Group Plc (VOD) surged 7 percent after people familiar with the situation said Verizon Communications Inc. is working to resolve its relationship with Vodafone this year, with options under consideration including an end to their wireless joint venture and a full merger of the two companies.
Admiral Group Plc (ADM), the U.K. motor insurer that owns the confused.com website, climbed as much as 5.1 percent to a 17- month high as full-year profit beat estimates. Edenred slid 3.3 percent as investment firm Eurazeo SA sold a 10 percent stake in the French provider of prepaid voucher programs.
The six-day advance for Spanish bonds is the longest run since Aug. 21. Italian securities also rose, with 10-year yields dropping 14 basis points to 4.59 percent.
German Bunds
The yield on German 10-year bunds, Europe’s benchmark government securities, rose one basis point to 1.46 percent. Treasuries dropped for a third day, sending the 10-year note yield two basis points higher to 1.92 percent.
The Swiss franc fell 0.2 percent to 1.2305 per euro after dropping to 1.2318, the weakest level since Feb. 25. The Swiss currency declined 0.4 percent to 94.47 centimes per dollar.
U.S. stocks climbed yesterday after the Institute for Supply Management’s index of non-manufacturing businesses, which covers about 90 percent of the U.S. economy, increased to 56 last month from 55.2 in January. Readings above 50 signal expansion.
The advance in S&P 500 futures indicated the gauge will extend its highest level since October 2007. A report from the ADP Research Institute today may show U.S. companies added 170,000 positions in February, following a 192,000 increase the previous month, economists forecast in a Bloomberg News survey. Other data may show factory orders fell 2.2 percent in January after a 1.8 percent gain in December, economists said.
Hugo Chavez
Venezuela’s dollar-denominated bonds fell for a second day after President Hugo Chavez died and his deputy stepped in to run the country, South America’s biggest oil exporter.
The yield on the $4 billion of notes maturing in 2027 rose to 9.03 percent, the highest since Feb. 25, after Vice President Nicolas Maduro said on state television that Chavez died at a military hospital in Caracas and urged Venezuelans to refrain from violence.
West Texas Intermediate crude for April delivery was 11 cents lower at $90.72 a barrel in electronic trading in New York.
Kenya’s shilling headed for its biggest drop against the dollar in more than a year as results from presidential elections on March 4 were delayed. The currency of East Africa’s biggest economy weakened as much as 1.4 percent.
Emerging Markets
The MSCI Emerging Markets Index (MXEF) rose 0.7 percent to 1,057.04, heading for the highest close since Feb. 20, led by financial and industrial stocks. Hungary’s BUX Index (BUX) added 1.3 percent.
Zinc fell as much as 1.1 percent to $1,986 a metric ton, the lowest since Jan. 17, and lead declined 0.8 percent to $2,207.75 a ton, the lowest since Dec. 7. Europe accounts for 14 percent of lead demand and 18 percent of zinc usage, according to Barclays Plc.
Australia’s dollar advanced against most of its major counterparts, gaining 0.2 percent to $1.0279 after rising 0.6 percent yesterday. The nation’s fourth-quarter GDP advanced 0.6 percent from the previous three months, when it rose a revised 0.7 percent that was higher than initially reported, a Bureau of Statistics report released in Sydney today showed. The result matched the median of 28 estimates in a Bloomberg News survey.
To contact the reporters on this story: Michael Shanahan in London at mshanahan3@bloomberg.net;
To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net
