U.S. Stock-Index Futures Rise; Exxon Mobil, Barrick Gold Climb

By Adam Haigh

Dec. 16 (Bloomberg) -- U.S. stock-index futures advanced before reports and a Federal Reserve statement that may signal the recovery in the world’s largest economy is gathering pace.

Exxon Mobil Corp., the biggest oil company, and Barrick Gold Corp. increased with crude and gold prices. Builders in November probably broke ground on more U.S. homes, and gains in consumer prices were within the Fed’s long-term forecasts, economists said. The Federal Open Market Committee is forecast to leave its benchmark interest rate unchanged at almost zero.

Futures on the Standard & Poor’s 500 Index expiring in March rose 0.5 percent to 1,108.90 as of 10:01 a.m. in London. Dow Jones Industrial Average Index futures gained 0.4 percent to 10,440. Nasdaq-100 Index futures added 0.5 percent to 1,804.50.

The S&P 500 has rebounded 65 percent from a 12-year low in March after manufacturing and consumer spending increased and the U.S. government lent, spent or guaranteed more than $11 trillion to end the recession.

“We’ve seen a significant improvement in credit conditions in the capital markets” this year amid low interest rates, said Bob Parker, who helps manage about $600 billion as vice chairman of Credit Suisse Asset Management in London. “The probability of us going back into recession is exceptionally low.” He predicted that the Fed will raise interest rates “very slowly” starting in the third quarter of 2010.

Fed Chairman Ben S. Bernanke and his colleagues may indicate the recovery is gaining strength while repeating a pledge to keep the benchmark interest rate almost at zero for an “extended period.”

FOMC Meeting

The FOMC gathers as growth in the final quarter of 2009 accelerates to more than 4 percent, the fastest pace in almost four years, according to analysts’ forecasts. The committee will probably discuss how to eventually withdraw unprecedented programs to revive credit, including purchases of $1.43 trillion in housing debt, according to some economists. The policy statement is due around 2:15 p.m. Washington time.

Housing starts rose 8.5 percent to an annual rate of 574,000, according to the median forecast of 78 economists surveyed by Bloomberg News. A Labor Department report may show the cost of living climbed 0.4 percent last month. Both reports are scheduled for 8:30 a.m.

The U.S. economy may expand 3 percent to 4 percent next year, supported by a recovery in investment, job creation and fiscal and monetary stimulus, Princeton University economist Alan Blinder wrote in an article published on the Wall Street Journal’s Web site.

Oil, Gold

Exxon added 0.9 percent to $69.76 in German trading. Oil rose for a second day before a report forecast to show that U.S. crude inventories declined last week.

Barrick, the world’s largest gold producer, gained 1.1 percent to $39.52. Newmont Mining Corp. advanced 2.9 percent to $52.15. Bullion climbed in Asia as the dollar’s rally paused amid investor concern inflation may accelerate, boosting interest in the metal as a store of value.

The S&P 500 may rise about 8 percent to 1,200 by the end of next year, according to Morgan Stanley, which said it prefers stocks in North America over European shares. The benchmark index for U.S. equities will probably reach a peak early in 2010 before hitting a trough in the second or third quarter and a “comeback towards year-end,” Morgan Stanley strategists Jason Todd and Gerard Minack wrote in a report.

They have a “neutral” stance on North America, compared with an “underweight” position on Europe and the U.K., saying that U.S. stocks are “less vulnerable to sovereign stress and banks now less leveraged.”

Morgan Stanley’s forecast compares with an average projection for the S&P 500 to end 2010 at 1,223, according to the average of 10 projections in a Bloomberg News survey published Dec. 14.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net.