By Stephen Kirkland and Lynn Thomasson - Mar 1, 2012 10:20 PM GMT+0700
Stocks (SXXP) and commodities rose, while Treasuries slid, as borrowing costs fell for Spain and France, an industry group said default insurance on Greek debt won’t be paid out and U.S. jobless claims matched a four-year low.
The Standard & Poor’s 500 Index advanced 0.4 percent and the Stoxx Europe 600 Index added 1 percent at 10:18 a.m. in New York. The yield on Spain’s two-year notes retreated for an 11th day, dropping 15 basis points to 2.17 percent. The 10-year Treasury (USGG10YR) yield rose five basis points to 2.03 percent. The euro rose less than 0.1 percent to $1.3332. The S&P GSCI index of 24 commodities climbed 0.4 percent as Brent crude advanced for a second day in London.
Traders work at the New York Stock Exchange. Photographer: Scott Eells/Bloomberg
March 1 (Bloomberg) -- Scott Wren, a senior equity strategist at Wells Fargo Advisors, talks about the U.S. stock market and concerns about housing and unemployment. He speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Spain and France sold 12.5 billion euros ($16.7 billion) of bonds as the European Central Bank’s long-term refinancing operation of lending to banks helped spur demand. Manufacturing improved in China and the euro region, while another report showed U.S. factory activity grew less than economists forecast.
“The Spanish auction went well,” said Trung-Tin Nguyen, a hedge-fund manager at TTN AG in Zurich. “It looks like the market is happy with the LTRO allocation, which signals easing of monetary conditions. This helps the overall sentiment ahead of the U.S. data.”
JPMorgan Chase & Co., Bank of America Corp. and American Express Co. rose more than 1.7 percent to lead gains among 23 of the 30 stocks (SXXP) in the Dow Jones Industrial Average. Financial shares rallied 1.1 percent for the biggest gain among 10 groups in the S&P 500.
ISM Misses
Stocks briefly pared gains after the Institute for Supply Management’s factory index fell to 52.4 in February from 54.1 a month earlier. Fifty is the dividing line between growth and contraction, and economists surveyed by Bloomberg News projected the gauge would climb to 54.5. Estimates of the 79 economists ranged from 52 to 56.
Separately, reports showed consumer spending rose 0.2 percent in January, less than the 0.4 percent increase predicted by economists in a Bloomberg survey, while jobless claims fell to a level matching a four-year low.
More than three shares rose for every one that fell in the Stoxx 600 (SXXP) as results from Adecco SA and WPP Plc beat estimates. Adecco SA surged 8.5 percent. WPP gained 3.7 percent after saying revenue from continuing businesses will grow 4 percent this year as the London Olympics and U.S. presidential elections buoy the industry.
The difference in yield investors demand to own Spanish 10- year bonds rather than benchmark German bunds fell 19 basis points. The yield on France’s 10-year bond slid 10 basis points, narrowing the spread with bunds to 91 basis points.
Italy Yields
Italian two-year note yields fell 44 basis points to 1.69 percent, dropping below 2 percent for the first time since October 2010.
Default insurance on Greek debt won’t be paid out, the International Swaps & Derivatives Association said after it was asked to rule whether part of the nation’s $170 billion bailout was a credit event. The decision was unanimous, ISDA said. The yield on Greece’s 10-year bond rose 153 basis points, with the price falling below 20 percent of face value for the first time.
Veolia Environnement SA jumped 13 percent after saying it’s in exclusive talks to sell Transdev, its mass-transit unit. Vivendi SA (VIV) sank 8.3 percent after the owner of the world’s largest music and video-game companies projected that profit will slump this year as its SFR unit competes with a new entrant in France’s mobile-phone market.
Copper climbed 1.4 percent in London and Brent oil rose 0.6 percent to $123.37 a barrel. Gold jumped 0.7 percent to $1,709.25 an ounce after falling the most in three years yesterday.
The MSCI Emerging Markets Index (MXEF) fell 0.4 percent, dropping from a seven-month high. The Hang Seng China Enterprises Index (HSCEI) slid 1.9 percent on speculation China won’t ease monetary policy further. The BSE India Sensitive Index (SENSEX) retreated 1 percent on concern a wider-than-estimated budget deficit may restrict the central bank’s scope to cut rates and spur growth.
To contact the reporters 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: Nick Baker at nbaker7@bloomberg.net
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