By Lynn Thomasson and Maud van Gaal
Dec. 21 (Bloomberg) -- U.S. stock-index futures rose, indicating the Standard & Poor’s 500 Index may rebound from last week’s decline, as commodity prices gained and analysts recommended companies from Alcoa Inc. to Intel Corp.
Alcoa climbed 4.1 percent after Morgan Stanley lifted the largest U.S. aluminum producer to “overweight” on speculation prices of the metal will keep rallying. Intel Corp. added 1.8 percent as Barclays Plc analysts said shares of the world’s biggest computer-chip maker are cheap. Mosaic Co. and Potash Corp. of Saskatchewan Inc. climbed more than 2.8 percent following a recommendation from Goldman Sachs Group Inc. to buy the shares on the outlook for higher fertilizer prices.
Futures on the S&P 500 expiring in March added 0.5 percent to 1,103.3 at 8:42 a.m. in New York. Dow Jones Industrial Average Index futures gained 0.4 percent to 10,311. Nasdaq-100 Index futures increased 0.5 percent to 1,816.25. Stocks in Europe also rose, while Asian shares declined.
The S&P 500 has advanced 63 percent since reaching a 12- year low in March as the U.S. government lent, spent or guaranteed more than $11 trillion to end the recession. Reports scheduled for this week include existing home sales for November and third-quarter personal consumption and gross domestic product.
“We expect U.S. macro numbers scheduled for this week to confirm earlier reports that the economy is recovering,” said Dirk Pattyn, a Brussels-based fund manager at Bank Degroof, which manages the equivalent of $36 billion.
Weekly Loss
Stocks rose on Dec. 18, trimming a weekly loss for the S&P 500, after better-than-estimated profit at Oracle Corp. and Research In Motion Ltd. boosted technology companies.
Alcoa gained 4.1 percent to $15.17. Morgan Stanley said the shares may climb to $22 and predicted the rally in aluminum prices may continue in the first half of 2010.
Aluminum for delivery in three months climbed 0.9 percent on the London Metal Exchange today.
The dollar traded near a three-month high against the euro amid signs the economic recovery is accelerating and as concern some European nations may struggle to pay their debts bolstered demand for the U.S. currency. The Dollar Index fell for the first time in five days, losing 0.2 percent to 77.635.
Intel added 1.8 percent to $19.99. The stock was lifted to “overweight” from “equal weight” at Barclays, which cited “seemingly solid end market conditions, an upward bias to estimates and intriguing valuation” in a report to clients.
Potash Corp., the world’s biggest fertilizer producer, was added to the “conviction buy” list at Goldman Sachs, while Mosaic was upgraded to “buy.” Potash advanced 2.8 percent to $108. Mosaic, North America’s second-biggest fertilizer maker, soared 3.6 percent to $57.18.
‘Demand Recovery’
“Our view of a fundamental demand recovery in potash in 2010 remains unchanged,” Goldman Sachs analysts wrote in a report to clients dated Dec. 20. “We believe a near-worst-case scenario on 2010 potash pricing is now discounted in stocks.”
Barron’s said Mosaic may rise as much as 45 percent in the next two years as prices rebound and earnings increase.
Terex Corp., the third-largest maker of construction equipment, jumped 10 percent to $21.15 after agreeing to sell its mining business to Bucyrus International Inc. for $1.3 billion in cash. Bucyrus surged 8.5 percent to $55.14.
American companies are paying the biggest premiums on record in takeovers, a sign executives are growing more bullish about profits and stocks even after the biggest rally for the S&P 500 in 73 years. The average premium in mergers and acquisitions in which U.S. companies were the buyer and seller rose to 56 percent this year from 47 percent last year, data compiled by Bloomberg show.
To contact the reporters on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net; Maud van Gaal in Amsterdam at mvangaal@bloomberg.net.
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