Euro Snaps Five-Day Advance, Most Stocks Fall

By Stephen Kirkland and Shiyin Chen - Oct 25, 2011 4:44 PM GMT+0700
Enlarge image

Asian stocks and U.S. equity-index futures slid and the euro snapped a five-day advance against the dollar before European leaders hold a summit tomorrow to discuss ways to contain the region’s debt crisis. Photographer: Chris Ratcliffe/Bloomberg

Play Video

Oct. 25 (Bloomberg) -- Markus Rosgen, Hong Kong-based chief Asian strategist at Citigroup Inc., talks about the outlook for Asian and U.S. equity markets. Rosgen also discusses the impact of Europe's debt crisis on global stocks. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Commodities rose for a third day while stocks and U.S. index futures fluctuated as energy companies reported earnings that beat estimates and investors awaited tomorrow’s European leaders’ meeting to resolve the region’s debt crisis.

Oil advanced 1 percent, leading the Standard & Poor’s GSCI index of 24 commodities 0.4 percent higher at 10:40 a.m. in London. The Stoxx Europe 600 Index increased 0.1 percent, after gain as much as 0.4 percent and losing 0.4 percent. S&P 500 Index (SPX) futures added less than 0.1 percent. German bonds declined, with the 10-year yield climbing three basis points to 2.15 percent.

European leaders will hold a second summit in four days tomorrow, seeking to bolster the region’s rescue fund, recapitalize banks and provide debt relief to Greece. Boosting the effectiveness of the European Financial Stability Facility will require further talks with investors as German lawmakers prepare to vote on its new powers, a European Union document showed. BP Plc said today profit dropped less than expected, while BG Group Plc’s third-quarter earnings rose 25 percent.

“The dominant factor is what’s happening in Europe,” said Angus Gluskie, who manages more than $350 million at White Funds Management in Sydney. There may be “superficial optimism that some sort of deal might be reached. Underneath the surface, though, I think investors still have a lot of questions in the back of their minds and they are alert to risks.”

Thailand Floods

Oil in New York jumped as much as 1.9 percent to $92.99 a barrel, the highest since Aug. 3, extending yesterday’s 4.4 percent advance. Rice climbed 1.6 percent on speculation floods in Thailand will boost demand for U.S. supplies. The S&P GSCI index gained 2.4 percent yesterday and 1 percent on Oct. 21.

The Stoxx 600 fluctuated near an 11-week high. BP, Europe’s second-biggest oil company, and BG, the U.K.’s third-largest natural-gas producer, rose more than 3.5 percent. Neste Oil Oyj, Finland’s only oil refiner, jumped 16 percent as the outlook for its renewable-fuels unit improved. STMicroelectronics NV (STM), Europe’s largest semiconductor maker, fell 7.1 percent after predicting fourth-quarter sales short of analysts’ estimates.

The S&P 500 index has gained for three days. Home prices in 20 U.S. cities probably fell at a slower pace and consumer confidence hovered near a two-year low, highlighting the obstacles facing the recovery in its third year, economists said before reports today.

Forty-three companies in the S&P 500 are due to release earnings today, according to data compiled by Bloomberg. About 73 percent of the 119 index members that have reported results since Oct. 11 have beaten analysts’ estimates, the data show.

Five-Day Gain

The euro snapped a five-day gain versus the dollar, weakening 0.1 percent to $1.3910. The Dollar Index, which tracks the U.S. currency against those of six of the country’s major trading partners, was little changed. The New Zealand dollar weakened versus all 16 of its major peers after the government said inflation slowed in the third quarter.

U.K. government bonds declined amid a sale of index-linked gilts managed by banks. The 10-year yield was five basis points higher at 2.61 percent. Spanish 10-year bonds were little changed as the nation sold 3.48 billion euros ($4.9 billion) of bills.

The MSCI Emerging Markets Index rose 1 percent to the highest in five weeks. The Shanghai Composite Index gained 1.7 percent as China Vanke Co.’s profit jump eased concern that the slowing economy and tighter monetary policies will spur a collapse in earnings. Thailand’s SET index climbed 2.9 percent as trading resumed after yesterday’s holiday.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Shiyin Chen in Singapore at schen37@bloomberg.net;

To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net