U.S. stocks advanced, with the Standard & Poor’s 500 Index (SPX) extending its best monthly gain since 2011, and Treasuries climbed. Australia’s dollar weakened as the central bank indicated it may lower interest rates, while commodities fell for a fifth day as metals declined. The S&P 500 rose 0.3 percent to 1,690.4 at 10:11 a.m. in New York and is up 5.3 percent in July. The Stoxx Europe 600 Index added 0.2 percent, with the gauge 5.1 percent higher this month, also the most since October 2011. The Aussie weakened at least 0.3 percent against all its 16 major peers, tumbling 1.4 percent versus its U.S. counterpart. The S&P GSCI gauge of 24 raw materials slipped 0.4 percent. Italian bonds gained after the government sold debt. U.S. stocks advanced as investors weighed earnings reports by companies from Pfizer Inc. to Eastman Chemical Co. and Express Scripts Holding Co. and President Barack Obama’s plan to overhaul business taxes. Reserve Bank of Australia Governor Glenn Stevens said inflation data leave room for rate cuts as central banks in the U.S., Europe and the U.K. meet this week. American consumer confidence weakened in July while a gauge of U.S. home prices rose the most in more than seven years, economic reports showed today. “The expectations for U.S. earnings had come down already and for the most part, companies are hitting them OK,� Veronika Pechlaner, who helps oversee the equivalent of about $2.3 billion as investment manager at Jersey, Channel Islands-based Ashburton Ltd., said by phone. “Markets will be sensitive to economic announcements again this week and particularly to what the Fed has to say.� Monthly Gain The S&P 500 advanced 4.9 percent this month, the most since January, as companies from Apple Inc. to Visa Inc. reported better-than-estimated earnings. Of the 302 companies in the S&P 500 that posted quarterly results so far in the season, 73 percent have exceeded analysts’ estimates for profit and 55 percent have topped sales projections, data compiled by Bloomberg show. Eastman Chemical gained 5.9 percent after raising its full-year profit forecast. Express Scripts retreated 2.6 percent even after increasing its 2013 outlook. Pfizer reported second-quarter profit that beat analysts’ estimates, sending the shares up 1.5 percent to help lead gains in the Dow Jones Industrial Average. (INDU) The Federal Open Market Committee, which has said it may start paring stimulus should the U.S. economy meet the central bank’s forecasts, starts a two-day meeting today. The Fed will probably maintain its benchmark interest rate at 0.25 percent, economists predict. Policy makers will begin to reduce the central bank’s bond-purchase program in September, a Bloomberg survey of economists shows. Obama Speech Obama, in a speech later today in Chattanooga, Tennessee, will argue that years of budget fights have diverted attention from the need to help middle-income Americans recover from the recession, according to administration officials. As an alternative to seeking quick passage of the deficit-reduction formula that has eluded lawmakers for two years -- some combination of increased tax revenue and entitlement curbs -- Obama will propose spending more on job creation efforts. The initiatives would include help for manufacturing, worker training, and infrastructure improvements. The S&P/Case-Shiller index of property values climbed 12.2 percent from May 2012, the biggest 12-month gain since March 2006, after advancing 12.1 percent a month earlier. The median projection of 31 economists surveyed by Bloomberg called for a 12.4 percent advance. The Conference Board’s index of U.S. consumer confidence decreased to 80.3 in July from 82.1 a month earlier, less than the median projection in a survey of economists for a reading of 81.3. European Stocks More than two shares advanced for every one that fell in the Stoxx 600, with trading volumes 7.5 percent below the 30-day average. Electricite de France SA, Europe’s biggest power generator, climbed 7.2 percent to the highest since November 2011 after raising its forecast for 2013 profit growth. Alcatel-Lucent SA, a French maker of phone equipment, jumped 15 percent as sales rose in the second quarter and the company said Qualcomm Inc. agreed to buy a minority stake. BP Plc (BP/), Europe’s second-biggest oil company, declined 3.3 percent after reporting profit that missed estimates. Barclays Plc, the U.K.’s second-largest bank by assets, retreated 6.9 percent after saying it will raise 5.8 billion pounds ($8.9 billion) in a rights offering. OAO Uralkali tumbled as much as 25 percent in Moscow as the world’s largest potash producer forecast global prices for the fertilizer ingredient will fall about 25 percent as it quits a trade venture with Belarusian Potash Co. and boosts shipments independently to countries including China. Producers Drop K+S AG, Europe’s largest potash producer, plunged 21 percent to the lowest in six years in Frankfurt trading. Israel Chemicals Ltd. sank 18 percent in Tel Aviv. Potash Corp. of Saskatchewan Inc. sank 23 percent in Toronto and Mosaic Co. tumbled 24 percent in New York. Most emerging-market stocks advanced even as the MSCI Emerging Markets Index was little changed. The gauge is 1.5 percent higher in July, headed for its best month this year. The Shanghai Composite advanced 0.7 percent after the People’s Bank of China added 17 billion yuan ($2.8 billion) to the financial system using reverse repos for the first time in five months. Benchmark gauges in South Korea, Taiwan and Turkey advanced at least 0.9 percent. India’s Sensex index lost 1.3 percent, declining for a fifth day in the longest slump in more than three months. The central bank kept interest rates on hold in line with analyst estimates and said increases in other borrowing costs this month to stem the rupee’s slide will be rolled back as the currency stabilizes. The rupee weakened 1.8 percent versus the dollar. Aussie Slides The Aussie slid 1.4 percent to 90.82 U.S. cents after touching 90.53 cents, the weakest level since July 15. The euro gained 0.1 percent to $1.3275. The pound slipped 0.4 percent to $1.5277 and lost 0.5 percent versus the euro. The Bank of England and European Central Bank announce rate decisions on Aug. 1. The Australian dollar has tumbled 10 percent this year, the most among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes, while the yen dropped 8.6 percent. The euro strengthened 5.3 percent. Swedish Economy Sweden’s krona weakened 1.1 percent against the euro today after a report showed the nation’s economy unexpectedly shrank in the second quarter. Gross domestic product contracted 0.1 percent in the three months through June from the previous quarter, when it grew 0.6 percent, preliminary data from Stockholm-based Statistics Sweden showed. Economists in a Bloomberg survey had predicted a 0.1 percent expansion. Treasuries rose, pushing the 10-year yield down three basis point to 2.57 percent. The rate on similar-maturity Italian bonds fell five basis points to 4.41 percent as the nation met its maximum target of 6.75 billion euros ($8.96 billion) at the sale of securities maturing in June 2018 and March 2024 today. Copper fell 2.1 percent and gold lost 0.5 percent to $1,323.8 an ounce. Silver dropped 0.5 percent, palladium fell 1.6 percent and platinum declined 0.6 percent. Oil declined 0.9 percent to $103.57 a barrel. Corn rallied from the lowest price in almost 34 months, adding 0.4 percent. To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net

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