Stocks in Europe Advance With U.S. Futures as Dollar Weakens; Oil Rallies

By Shiyin Chen and Monami Yui - Dec 22, 2011 3:13 PM GMT+0700

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Dec. 22 (Bloomberg) -- Masafumi Yamamoto, chief currency strategist in Tokyo at Barclays Bank Plc, talks about the outlook for global currencies. He speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

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Dec. 22 (Bloomberg) -- Alan Oster, chief economist at National Australia Bank Ltd., talks about Europe's sovereign debt crisis. The European Central Bank will lend euro-area banks a record amount for three years in its latest attempt to keep credit flowing to the economy during the debt crisis. Oster speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

European stocks and U.S. equity- index futures gained and the dollar weakened before data that may signal the world’s largest economy is recovering. Oil climbed for a fourth day after supplies in the world’s largest consumer of crude sank the most in a decade.

The Stoxx Europe 600 Index jumped 0.9 percent as of 8:06 a.m. in London. Standard & Poor’s 500 Index futures added 0.3 percent, reversing an earlier drop of 0.3 percent. The MSCI Asia Pacific Index lost 0.5 percent, retreating from a one-week high. Oil climbed 0.6 percent in New York, while copper advanced a third day. The Dollar Index declined 0.3 percent.

Data today may show U.S. consumer confidence improved this month, before a report tomorrow that may show personal spending grew at a faster pace in November. European Central Bank President Mario Draghi is scheduled to speak today after 523 euro-area lenders took a record 489 billion euros ($638 billion) in loans from the Frankfurt-based central bank yesterday.

“We’ve been seeing good data coming out of the U.S. and that indicates the economy is better than we had thought,” said Kiyoshi Ishigane, a senior strategist in Tokyo at Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest publicly traded bank.

About eight shares rose for every one that declined on the Stoxx 600. The gauge has dropped 13 percent this year, compared with a decline (MXAP) of 1.1 percent in the S&P 500 and an 18 percent slump in the MSCI Asia Pacific.

U.S. Economy

S&P 500 futures expiring in March fluctuated after the U.S. stock gauge completed a two-day, 3.2 percent advance. Treasury 10-year yields were little changed at 1.96 percent. The Thomson Reuters/University of Michigan final index of consumer sentiment probably increased to 68 this month from a preliminary reading of 67.7 and from 64.1 at the end of November, according to the median estimate of economists in a Bloomberg News survey. That would be the strongest level in six months.

A separate survey showed the number of initial jobless claims climbed to 380,000 in the week ended Dec. 17, after applications fell to 366,000 last week, the fewest since May 2008.

The dollar weakened 0.4 percent to $1.3095 against the euro, after rising yesterday when European banks took larger-than- forecast loans from the central bank. The borrowings equal about 63 percent of the European bank debt maturing in 2012, according to Goldman Sachs Group Inc.

Draghi will hold a media briefing in Frankfurt today after a meeting of the European Systemic Risk Board. He said on Dec. 19 that lenders in the euro region will experience “very significant” funding constraints next year and that there are “substantial downside risks” to the economy.

Crude for February delivery climbed as much as 0.6 percent to $99.28 a barrel on the New York Mercantile Exchange, extending a three-day advance. Figures from the Energy Department yesterday showed U.S. stockpiles declined 10.6 million barrels last week to 323.6 million, the largest drop since Feb. 16, 2001. They were forecast to decrease 2.13 million barrels, according to a Bloomberg News survey. Imports slipped to a three-year low.

To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net