Stocks Advance, Euro Rebounds After Summit

By Stephen Kirkland and Lynn Thomasson - Dec 9, 2011 8:37 PM GMT+0700

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Dec. 9 (Bloomberg) -- Steve Brice, chief investment strategist at Standard Chartered Plc in Singapore, talks about the outlook for gold prices. Brice also discusses China's economy, stocks and investment strategy. He speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Brice spoke before China announced its consumer price index data for November. Source: Bloomberg)

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Dec. 9 (Bloomberg) -- Kent Smetters, a professor at the University of Pennsylvania’s Wharton School and a former Treasury Department economic policy official, talks about Europe's sovereign debt crisis. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

European stocks and U.S. index futures gained while the euro rebounded after the region’s leaders boosted a rescue fund and tightened budget rules to stem the debt crisis. Italian 10-year bonds fell and the cost of insuring against default increased for a third day.

The Stoxx Europe 600 Index added 0.5 percent at 8:35 a.m. in New York, having earlier retreated as much as 0.9 percent. Standard & Poor’s 500 Index futures climbed 0.5 percent, while the MSCI Asia-Pacific Index slid 2.1 percent. The euro jumped 0.2 percent to $1.3369, after weakening 0.4 percent. The 10-year Italian bond yield rose nine basis points to 6.55 percent. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments increased five basis points to 367.

Leaders holding all-night talks in Brussels added 200 billion euros ($267 billion) to their crisis-fighting warchest and tightened anti-deficit rules, an accord hailed by European Central Bank President Mario Draghi as a “very good outcome.” U.S. consumer confidence probably improved this month, economists said before a report today. Data earlier signaled weakening growth in China, Japan and South Korea.

“I don’t think there’s much of a disappointment in the summit that we’ve seen overnight,” said Otto Waser, chief investment officer at Research & Asset Management AG, told Bloomberg Television from Zurich. “We’re 20 percent where we should be towards fiscal union to rescue the euro.”

Insurers Advance

Three stocks (MXWD) gained for every one that declined in the Stoxx 600. UniCredit SpA of Italy and Deutsche Bank AG led financial companies higher, advancing at least 4 percent. Alcatel-Lucent SA, France’s largest telecommunications-equipment supplier, climbed 4.7 percent as Sanford C. Bernstein & Co. upgraded the shares.

The increase in U.S. futures indicated the S&P 500 will pare this week’s 0.8 percent decline. The Thomson Reuters/University of Michigan index of consumer sentiment probably rose to 65.8 in December from 64.1 in November, the highest level since June, according to the median of 73 estimates in a Bloomberg survey.

DuPont Co., the world’s biggest maker of titanium dioxide, fell 4.3 percent in pre-market trading after lowering its forecast for the current fiscal year.

Italian two-year notes erased their declines, with the yield falling 15 basis points, as the ECB bought the nation’s debt, according to three people with knowledge of the trades, who declined to be identified because the transactions are confidential. The yield earlier jumped as much as 40 basis points. A spokesman at the ECB in Frankfurt declined to comment.

Belgian Bonds

Belgian 10-year yields fell 17 basis points, while Spanish yields were five basis points higher. German bunds reversed gains, sending the yield up six basis points to 2.08 percent after it earlier fell to 1.98 percent.

The MSCI Emerging Markets Index (MXEF) slipped 1.8 percent, headed for the steepest loss since Nov. 23. The Hang Seng China Enterprises Index (HSCEI) sank 3.2 percent in Hong Kong, India’s Sensex slipped 1.7 percent and South Korea’s Kospi Index (KOSPI) slumped 2 percent. Russia’s Micex Index (INDEXCF) declined 3.5 percent before a demonstration tomorrow in Moscow to protest alleged ballot-box stuffing in Dec. 4 elections.

To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net;

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