U.S. Stock-Index Futures Gain; Alcoa, Citigroup, AMD Advance

By Daniela Silberstein

Aug. 24 (Bloomberg) -- U.S. stock-index futures rose, indicating the Standard & Poor’s 500 Index will gain for a fifth day, the longest winning streak since November, as higher commodity prices boosted the outlook for raw-material producers.

Alcoa Inc., the largest U.S. aluminum producer, and ConocoPhillips climbed in Germany as copper rallied and oil traded near a 10-month high. Citigroup Inc. and Bank of America Corp. both gained more than 1.5 percent in pre-market trading in New York. Advanced Micro Devices Inc. climbed 5.1 percent after Citigroup recommended buying the shares.

Futures on the S&P 500 expiring in September added 0.2 percent to 1,027.7 at 11:57 a.m. in London. Dow Jones Industrial Average futures advanced 0.3 percent to 9,519, while Nasdaq-100 Index futures gained 0.1 percent to 1,637. Stocks in Asia and Europe also increased.

“The hope that the recovery is beginning to show is driving equities,” said Gregor Mast, an equity strategist at Clariden Leu AG in Zurich, which oversees about $88 billion. “Sentiment is improving but what is more important is the participation. A lot of people are still on the sidelines and underinvested. The current valuations anticipate a recovery in profits and we now need to see confirmation from the corporate side that we have seen the low points and the recovery is sustainable.”

Stocks last week rose for the fifth time in six weeks, sending the S&P 500 to the highest level since October, as rising commodity prices and a surge in home sales signaled an economic recovery. A 52 percent rebound from a 12-year low on March 9 left the measure valued at 18.92 times the profits of its companies, the highest ratio since 2004, weekly data compiled by Bloomberg show.

Bernanke, Trichet

Federal Reserve Chairman Ben S. Bernanke and European Central Bank President Jean-Claude Trichet, speaking at the annual central bankers’ symposium in Jackson Hole, Wyoming last week, said the world economy is pulling out of its deepest recession since the 1930s.

Nouriel Roubini, the New York University professor who predicted the credit crisis, wrote in today’s Financial Times that he sees increased risks of a double-dip recession as governments try to unwind economic stimulus packages.

Alcoa rose 1.4 percent to $12.73 in Germany. Freeport- McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, advanced 1.8 percent to $66.20. Industrial metals rose in London and Shanghai on signs that the global economy is recovering, improving the demand outlook.

ConocoPhillips

ConocoPhillips, the second-largest U.S. refiner, added 1.1 percent to $44.68 as crude oil traded above $73 a barrel in New York.

Commodity companies, the most-expensive stocks in the S&P 500, are turning into relative bargains. While investors are paying an average 33.1 times earnings this year for copper, plastic and seed producers, the premium drops to 17.7 based on 2010 analyst estimates that call for profits to almost double, data compiled by Bloomberg show. The decline in the price- earnings ratio is the steepest for any group in the S&P 500 and would leave the companies 23 percent less expensive than their historical average of 23.2 times.

Citigroup, the bank rescued by a $45 billion U.S. bailout, surged 4.5 percent to $4.91 in New York. Bank of America added 1.7 percent to $17.75. Bank of America, which has lost 10 directors through resignations or retirement since April, elected former Morgan Stanley executive Robert Scully to its board, which now has 14 members.

AMD

Advanced Micro Devices climbed 5.1 percent to $3.89. The second-largest maker of personal-computer processors was raised to “buy” from “hold” at Citigroup, which said the company’s competitive position and gross margin will likely improve.

American Express Co. gained 2.8 percent to $33.77 in Germany. The largest credit-card company by purchases, Capital One Financial Corp. and Discover Financial Services were raised to “overweight” at Barclays Capital Inc., which said a peak in charge-offs is near and the companies will benefit from declining credit costs.

Procter & Gamble Co. increased 0.8 percent to $54 in New York. Warner Chilcott Ltd., a maker of birth-control pills and acne medication, plans to buy the world’s biggest household- goods maker’s prescription-drug business for about $3.1 billion, according to a person familiar with the matter.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.