Stocks, Commodities Gain as Treasuries Fall on U.S. Confidence

By Michael P. Regan and Rita Nazareth - Nov 29, 2011 10:23 PM GMT+0700

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Nov. 29 (Bloomberg) -- David Gaud, a Hong Kong-based senior portfolio manager of Edmond de Rothschild Asset Management, talks about Asian stocks and investment strategy. Gaud also discusses Europe's sovereign debt crisis. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

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Nov. 28 (Bloomberg) -- Sean Egan, president of Egan-Jones Ratings Co., talks about the agency's decision to cut Italy’s credit rating. Italy’s credit rating was cut to BB from BB+ by Egan-Jones as the euro-region’s third-largest economy struggles to manage its debt amid record borrowing costs and a slowing economy. Egan, speaking on Bloomberg Television's "InBusiness with Margaret Brennan," also discusses the rating firm's analysis of Jefferies Group Inc. (Source: Bloomberg)

Stocks and commodities rose for a second day as U.S. consumer confidence increased by the most since 2003 and European finance ministers prepared to discuss efforts to tame the region’s debt crisis. Treasuries fell and the euro resumed gains.

The Standard & Poor’s 500 Index added 0.9 percent to 1,202.64 at 10:23 a.m. in New York and the Stoxx Europe 600 Index rose 0.7 percent. The euro climbed 0.2 percent to $1.3343 after earlier erasing a gain of as much as 0.9 percent. The S&P GSCI gauge of 24 commodities gained 1.1 percent. Ten-year U.S. Treasury yields increased six basis points to 2.04 percent.

U.S. stocks extended early gains (SPX) as the Conference Board’s consumer-sentiment gauge increased to 56 from a revised 40.9 in October as Americans grew more optimistic about jobs and income prospects. Europe’s efforts to expand its bailout fund to 1 trillion euros ($1.3 trillion) is falling short, forcing renewed consideration of a role for the European Central Bank in halting bond-market turmoil, two officials familiar with the discussions said.

“The economic reports have shown that the U.S. has been insulated from all the noise coming out of Europe,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees $550 billion. “Consumers are not really bothered by that, at least not yet,” he said.

Rally Extended

The S&P 500 snapped a seven-day slump yesterday, rallying 2.9 percent for its largest gain in a month, after Thanksgiving- weekend retail sales rose to a record and speculation grew that European leaders would increase efforts to fight the region’s debt crisis.

AMR Corp., the parent of American Airlines, tumbled 83 percent after filing for bankruptcy as it failed to secure cost- cutting labor agreements.

The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, declined 0.4 percent.

Among European stocks, Remy Cointreau jumped 3.1 percent after France’s second-biggest distiller predicted “a substantial increase” in full-year earnings. Colruyt SA, Belgium’s largest discount-food retailer, tumbled 9.4 percent after reporting worse-than-estimated fiscal first-half profit.

----With assistance from Adria Cimino in Paris, Will Hadfield and Daniel Tilles in London. Editor: Michael P. Regan

To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Rita Nazareth in Sao Paulo at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net