Brazilian Stocks Rise After U.S. Economy Loses Fewer Jobs

By Alexander Ragir and James Attwood

Jan. 9 (Bloomberg) -- Brazilian stocks rose for a second day after the U.S. economy lost fewer jobs than economists estimated last month.

Banco do Brasil SA climbed the most on the Bovespa index after the largest government-controlled lender agreed to buy a 50 percent stake of Banco Votorantim SA. Telemar Norte Leste SA gained after it acquired 61 percent of Brasil Telecom Participacoes SA’s voting shares.

The Bovespa climbed 1.1 percent to 42,452.64 at 8:49 a.m. New York time. It dropped as much as 0.9 percent earlier.

The U.S. lost 524,000 jobs in December. It was less than forecasts and followed a drop of 584,000 in November, bringing job losses for 2008 to 2.589 million, according to a Labor Department report today in Washington.

Banco do Brasil surged 5.8 percent to 16.29 reais, the highest intraday price since Dec. 11. The lender agreed to buy a 50 percent stake of Banco Votorantim SA for 4.2 billion reais ($1.8 billion).

Telemar gained 0.7 percent to 53.42 reais, after rising as much as 1.8 percent earlier. Brazil’s largest telephone company said it paid 5.37 billion reais ($2.3 billion) for 61 percent of Brasil Telecom voting shares.

Chile

In Chile, the benchmark index rose today for its fifth straight weekly gain, as a bigger-than-forecast interest-rate cut boosted consumer stocks.

Chile’s Ipsa Index rose 0.2 percent to 2,490.59 as retailers Cencosud SA and Ripley Corp SA climbed about 3 percent.

The index extended a gain this week to 2.2 percent after the central bank lowered its benchmark interest rate by a full percentage point, surprising all 20 economists in a Bloomberg survey. The decision was announced after markets closed yesterday.

“The market likes lower interest rates, so I would expect it to react pretty well,” Matthew Hickman, who manages $500 million in Latin American assets at Credit Suisse Asset Management, said by phone last night from New York.

Cencosud, the country’s biggest retailer, rose 2.8 percent to 1,065 pesos, extending this week’s gain to 11 percent.

The Ipsa dropped 22 percent last year as retailers including Cencosud and La Polar SA lost more than half their value on concern tightening credit conditions and a slowing economy are stifling spending.

To contact the reporter on this story: James Attwood in Santiago at jattwood3@bloomberg.net