Feb. 2 (Bloomberg) -- European stocks rose for a third day as mining shares
rallied the most in two months, while U.S. index futures advanced. The
Australian dollar dropped after the central bank unexpectedly left interest
rates unchanged.
The Dow Jones Stoxx 600 Index increased 0.4 percent at 11:39 a.m. in London as
a gauge of 29 mining companies gained as much as 3.2 percent. Futures on the
Standard & Poor’s 500 Index climbed 0.2 percent. Copper added more than 1
percent on the London Metal Exchange. Australia’s currency weakened against all
16 of its most-traded peers.
Commodities are rallying on speculation the dollar’s weakness will spur
alternative investments as economic growth buoys demand for raw materials. The
Dollar Index, a measure of the currency against those of the biggest U.S.
trading partners, has fallen 8 percent in the last 12 months, while copper has
doubled and oil is up 88 percent. Sales of existing U.S. homes may have
stabilized in December after a record November plunge, economists estimated
before a government report today.
“The economic data and earnings remain very buoyant,” Jim Reid, a strategist
at Deutsche Bank AG in London, wrote in a research note. “There is no doubt
that on calmer days where we receive no external shocks on Greece, financial
reforms, or hints of tightening actions from China, the focus for markets turns
to the good news.”
Rio Tinto, BP
Rio Tinto Group led gains in European stocks after Citigroup Inc. recommended
shares of the world’s third-biggest mining company. BP Plc, Europe’s largest
oil producer, slid the most in 11 months because earnings missed analysts’
estimates.
The MSCI World Index of 23 developed nations’ stocks added 0.5 percent. The
MSCI Asia Pacific Index gained the most in two weeks after U.S. manufacturing
expanded. Canon Inc., a camera maker that gets about 28 percent of revenue from
the Americas, climbed 2.7 percent in Tokyo. Toyota Motor Corp. gained 4.5
percent after the automaker said it will resume some production operations that
were halted after recalling 2.3 million cars to fix faulty accelerator pedals.
U.S. stock-index futures rose 0.3 percent after the S&P 500 yesterday posted
its biggest jump in a month. The number of contracts to buy previously owned
U.S. homes was probably little changed in December after a record plunge a
month earlier, according to the median of economists’ forecasts in a Bloomberg
survey. The report is due at 10 a.m. in Washington.
Earnings Rebound
A record nine-quarter earnings slump for S&P 500 companies is projected to
have ended in the final three months of 2009 with a 76 percent increase in
profits. Almost 80 percent of the results released since Jan. 11 topped the
average forecasts of Wall Street estimates, data compiled by Bloomberg show.
Dow Chemical Co. reported today earnings per share of 18 cents, beating the
average analyst estimate of 12 cents.
The Australian dollar dropped 1.3 percent against the U.S. dollar and the yen
after the Reserve Bank of Australia left its key rate at 3.75 percent, defying
the forecasts of all 20 analysts in a Bloomberg survey and signaling policy
makers want to gauge the strength of the recovery before raising borrowing
costs again. Economists anticipate that the European Central Bank and the Bank
of England will keep borrowing costs unchanged when they meet later this week.
Central banks around the world are weighing how soon to withdraw
economic-stimulus measures and raise interest rates from record lows. The BOE
will decide Feb. 4 whether to increase a 200 billion-pound ($319 billion)
program of asset purchases designed to revive the economy.
Volcker Stand
Paul Volcker, head of the U.S. Economic Recovery Advisory Board, is likely to
repeat his call to prohibit commercial banks from owning hedge funds and limit
their ability to trade for their own accounts when he testifies to the Senate
Banking Committee.
Copper for delivery in three months rose 1 percent to $6,855 a metric ton on
the London Metal Exchange, leading gains in industrial metals. Gold for
immediate delivery added 0.7 percent to $1,113.05 an ounce. Crude oil added 1.1
percent to $75.24 a barrel in New York.
The MSCI Emerging-Markets Index climbed 0.3 percent as Russia’s Micex Index
gained 1 percent and Abu Dhabi’s ADX Index advanced 0.8 percent. Romania’s BET
index rose 0.4 percent as economists predict the central bank will lower its
interest rate by half a percentage point tomorrow.
Government bonds fell, with the yield on the U.S. 10-year Treasury rising 1
basis point to 3.66 percent. The yield on the German bund increased a like
amount to 3.19 percent.
To contact the reporter on this story: Justin Carrigan in London at
[email protected]
===
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