By Daniela Silberstein
Sept. 16 (Bloomberg) -- U.S. stock-index futures advanced, indicating the Standard & Poor’s 500 Index may extend its highest level in almost a year, as gains in commodities lifted raw-material producers.
Alcoa Inc. and Barrick Gold Corp. rose at least 1.7 percent as metal prices climbed. Citigroup Inc. rallied 4.4 percent as people familiar with the situation said the third-biggest U.S. bank is planning an exit from the government debt guarantee program. General Electric Co. climbed 2 percent before a report that may show industrial production increased.
Futures on the S&P 500 expiring in December added 0.5 percent to 1,051.30 as of 12:03 p.m. in London. Dow Jones Industrial Average futures gained 0.5 percent to 9,653. Nasdaq- 100 Index futures rose 0.3 percent 1,700.75. European and Asian stocks also advanced.
U.S. stocks climbed yesterday after growth in retail sales and New York manufacturing topped estimates and billionaire investor Warren Buffett said his company is buying equities.
“The U.S. recession is meanwhile over and we will see good growth in the third quarter,” said Marco Huwiler, a strategist at Clariden Leu in Zurich, which manages about $88 billion. “We are waiting for confirmation from the industrial sector that we are in a phase of an upturn. A positive number today could contribute to that.”
Reports today may show the Obama administration’s “cash- for-clunkers” plan helped to boost production and restrain prices, economists said. Industrial output probably climbed 0.6 percent last month as automakers cranked up assembly lines, according to the median of 75 projections in a Bloomberg survey before the Federal Reserve’s report at 9:15 a.m. in Washington.
Metal Prices
The S&P 500 has rebounded 56 percent from a 12-year low on March 9 on signs the recession is easing and as companies beat earnings estimates. Buffett told a conference in California yesterday that his Berkshire Hathaway Inc. is “buying stocks right as we speak” and he’s getting a “lot for my money” in equities.
Alcoa, the largest U.S. aluminum producer, added 1.7 percent to $14.23 in Germany. Copper gained for a second day on the London Metal Exchange. Aluminum, zinc, lead and nickel also increased.
Barrick Gold, the world’s biggest producer of the metal, added 2.6 percent to $38.95. Gold climbed to an 18-month high on concern that a global economic recovery may stoke inflation and on a drop by the dollar that boosted demand for the metal as an alternative investment.
Greenspan Comments
Former Fed Chairman Alan Greenspan said in a broadcast to Tokyo clients of Deutsche Bank Securities Inc. today that he’s concerned that lawmakers will hamper U.S. central bank efforts to rein in its monetary stimulus, and that inflation might “swamp” the bond market.
Citigroup climbed 4.4 percent to $4.30 in early New York trading. The largest user of U.S. government debt guarantees extended under last year’s bank rescue plans to exit the program as regulators push to withdraw aid intended as temporary, people familiar with the matter said.
The bank has been in discussions with the Federal Deposit Insurance Corp. over exiting the program when it expires on Oct. 31, the people said. The bank, which had $72.4 billion of FDIC- guaranteed debt outstanding as of June 30, doesn’t plan to seek an emergency extension, one of the people said.
FDIC spokesman David Barr declined to comment, as did Danielle Romero-Apsilos, a spokeswoman for the bank.
Economy Watch
Bank of America Corp., which said yesterday that it had won approval from the FDIC to exit the program, advanced 1.4 percent to $17.02.
GE, the world’s largest maker of power-plant turbines, added 2 percent to $16.32.
Rambus Inc. rose 2.9 percent to $18.55 in German trading. The designer of chips for Sony Corp.’s PlayStation video-game console said it expects revenue for the third quarter of as much as $28 million, boosting its forecast from an earlier projection of $25 million at most.
Omniture Inc. rallied 23 percent to $21.28 in Germany. Adobe Systems Inc., the biggest maker of graphic-design software, agreed to buy the maker of software that allows companies to gauge the effectiveness of their online advertising for $21.50 a share, or $1.8 billion. Adobe dropped 3.4 percent to $34.42 in early New York trading.
Figures from the Labor Department at 8:30 a.m. are expected to show the cost of living rose 0.3 percent, the survey showed, reflecting a jump in fuel costs that was offset in part by the government’s incentive to trade in older cars.
V-Shaped Recovery
Other reports today may show the current-account deficit, the broadest measure of trade because it includes transfer payments and investment income, narrowed in the second quarter, and homebuilders became less pessimistic this month.
Global stocks are in the middle of a “V-shaped recovery,” led by emerging markets, that will last for at least another six months, billionaire investor Kenneth Fisher said.
“The bigger and uglier the bear market, usually the bigger the V,” Fisher, who manages $28 billion as chief executive officer of Fisher Investments Inc. in Woodside, California, said in an interview in New York. “A normal V-shaped recovery lasts one year, and the current rally started in March.”
Investor sentiment deteriorated from Tokyo to Paris and New York on speculation a six-month rally in stocks has outstripped the prospects for earnings as indexes trade at the most expensive valuations since 2003. Optimism for equities fell in seven of 10 countries in the Bloomberg Professional Confidence Survey. Users expect stocks to decline during the next six months in the U.S.
To contact the reporters on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.
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