By Stephen Kirkland and Shiyin Chen - Oct 26, 2011 9:09 PM GMT+0700
Stocks rose as Germany’s lower house of parliament approved plans to boost the European bailout fund and U.S. durable-goods orders topped forecasts. Metals rallied as Chinese Premier Wen Jiabao stoked speculation he will ease monetary policy. Treasuries slid.
The Standard & Poor’s 500 Index added 0.5 percent to 1,235.11 at 10:08 a.m. in New York following yesterday’s 2 percent slide. The Stoxx Europe 600 Index increased 0.6 percent and shares in emerging markets gained for a fourth day. Equities trimmed gains and the euro reversed its advance as Europe’s negotiations with banks about the size of losses on Greek debt were suspended. Ten-year U.S. Treasury yields fell five basis points to 2.16 percent. Copper surged 4.9 percent.
European shares climbed to their highs of the session after German lawmakers backed an increase in the 440 billion-euro ($613 billion) rescue fund as leaders prepared to meet for the 14th crisis summit in 21 months to discuss Greece’s second bailout. Orders for U.S. durable goods excluding transportation equipment rose in September by the most in six months. Wen said China’s economic policy will be fine-tuned as needed and the industry ministry said it is studying “stimulative policies” for smaller companies.
“There is scope for great disappointment” from the European summit, Gary Jenkins, head of fixed income at Evolution Securities in London, said in a report. “Though if there seems to be general agreement on the bigger scheme and a tight timeframe for the details to be worked out markets may give them the benefit of the doubt.”
Beating Estimates
The S&P 500 rose for the fourth time in five days, erasing almost half of yesterday’s slump. The index has rebounded 13 percent from a 13-month low on Oct. 3 amid higher-than-forecast corporate earnings and growing confidence in European leaders to tame the region’s debt crisis.
Boeing Co. gained 4.7 percent after reporting earnings that topped estimates and raising its forecast. ConocoPhillips rose 1.3 percent after adjusted net income exceeded estimates. More than 50 companies in the S&P 500 are due to report earnings today. Per-share earnings topped estimates at about three- quarters of the companies in the index that released results since Oct. 11, according to data compiled by Bloomberg.
International Business Machines Corp. advanced 0.7 percent after naming Virginia Rometty to succeed Sam Palmisano as chief executive officer. Amazon.com Inc., the world’s largest Internet retailer, tumbled after posting lower-than-estimated earnings.
Housing Data
The Stoxx 600 advanced after fluctuating between gains and losses at least seven times. Banks rose 1.1 percent as a group, with BNP Paribas SA and Deutsche Bank AG up at least 1.9 percent to pace gains. The group of lenders trimmed its advance after an EU official said talks with banks on bondholder losses as part of a second Greek rescue package are deadlocked and have been suspended.
Merck KGaA jumped 8.6 percent as the German maker of the Erbitux cancer drug reported profit that beat analysts’ estimates.
Two-year and 30-year Treasuries also declined, sending yields up at least two basis points. The government plans to auction $35 billion of five-year notes, while the Federal Reserve sells between $8 billion and $9 billion of notes as part of its quantitative-easing program.
The dollar weakened against 10 of 16 major peers, with the Mexican peso, Canadian dollar and Brazilian real climbing at least 0.7 percent. The Australian dollar fell versus 13 of 16 peers after a report showed inflation slowed.
The yield on 10-year German bunds rose one basis points to 2.07 percent. Demand for 12-month loans from the ECB was weaker than analysts forecast, with banks borrowing 56.9 billion euros, less than the 70 billion euros forecast in a Bloomberg survey of analysts.
Italy Elections
Italian ten-year yields fell four basis points after the government sold 8.5 billion euros of 182-day notes and 2 billion euros of 2013 bonds. Prime Minister Silvio Berlusconi agreed with Umberto Bossi, leader of the Northern League, which holds the key to Berlusconi’s parliamentary majority, to bring elections forward to 2012 in exchange for reforms on pensions, liberalization and bureaucracy, la Repubblica reported.
The S&P GSCI index of 24 commodities slipped 0.2 percent, snapping a three-day rally. Crude oil fell 0.7 percent to $92.56 a barrel, retreating from the highest price since Aug. 2, after the American Petroleum Institute said U.S. supplies rose last week.
Gold futures were up 0.8 percent at $1,713.50 an ounce, trimming a gain of as much as 1.3 percent.
The MSCI Emerging Markets Index added 0.7 percent. The Shanghai Composite Index jumped 0.7 percent and Russia’s Micex Index increased 2.9 percent. Turkey’s ISE National 100 Index slipped 0.8 percent after the central bank halted daily lending at the one-week repo rate, while the lira strengthened 0.9 percent against the dollar as policy makers increased the amount of foreign-exchange reserves for lenders.
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: Nick Baker at nbaker7@bloomberg.net
Posts
No comments:
Post a Comment