Aug. 11 (Bloomberg) -- U.S. equity-index futures rose, European stocks rebounded from a two-year low and metals rallied. Treasuries fell for the first time in four days and the Swiss franc weakened. Standard & Poor’s 500 Index futures climbed 1.8 percent at 10:02 a.m. in London after the gauge’s 4.4 percent slump yesterday. The Stoxx Europe 600 Index jumped 2 percent. France’s CAC 40 Index added 2.6 percent, with Societe Generale SA rallying 7.8 percent. The five-year Treasury note yield rose six basis points to 0.98 percent. The Swiss franc depreciated against all 16 major peers while China’s yuan strengthened beyond 6.4 per dollar for the first time in 17 years. The Dollar Index lost 0.6 percent. Copper advanced 3.3 percent. A rout in global equity markets since July 26 has erased $7.9 trillion in equity values and made stocks in Europe and the U.S. the cheapest in about 2 1/2 years. Central bankers are trying to restore investor confidence, with the Federal Reserve pledging to keep interest rates near zero through at least mid- 2013 to bolster U.S. growth and the European Central Bank buying bonds to cap borrowing costs. “Valuation alone is rarely enough to turn markets but crucially we are now seeing tentative signs of more fundamental support,” Sharon Bell, an equity strategist at Goldman Sachs Group Inc. in London, said in a report today. “The ECB has started to buy Italian and Spanish debt pushing down spreads. Moreover, there are signs that the growth data is stabilizing at a low level.” S&P Futures The gain in S&P 500 futures indicated the gauge will rebound from near the lowest level in 11 months. Companies in the index are trading at 11.3 times estimated profits, near the cheapest since March 2009 as S&P’s unprecedented downgrade of the U.S. debt rating from AAA sent shares tumbling. Sixteen stocks rose for each that fell in the Stoxx 600. The gauge sank 3.8 percent yesterday, dragging valuations down to about 9.1 times estimated profits, the lowest since March 2009. Salzgitter AG, Germany’s second-biggest steelmaker, surged 16 percent today after posting a profit in the first half. Cisco Systems Inc. jumped 8.7 percent in pre-market New York trading after the world’s largest maker of networking equipment reported profit that beat analysts’ estimates. News Corp., owner of Fox TV and the Wall Street Journal, climbed in extended trading yesterday after it posted earnings that beat projections and raised its dividend 27 percent. Trade Deficit A report today may show the U.S. trade deficit narrowed in June from the highest level in almost three years, helped by cheaper imported crude oil. The gap shrank to $48 billion from $50.2 billion the prior month, according to the median estimate of 74 economists. Other data may show initial jobless claims rose last week. The franc dropped after Swiss central bank Vice President Thomas Jordan said policy makers could peg the franc for the first time in more than three decades as they struggle to stem a record-breaking rally. The franc traded at 1.0457 versus the euro after rising as high as 1.0257 earlier today. It reached a record 1.0075 on Aug. 9. Against the dollar, the currency traded at 73.36 centimes, down 1 percent. The euro traded at 109.13 yen after earlier sliding to a five-month low of 108.27 yen. The shared currency sank 1.5 percent against its Japanese counterpart yesterday amid speculation France’s creditworthiness was in doubt. The 30-year Treasury bond yield climbed seven basis points before the government sells $16 billion of the securities, after yesterday’s auction of 10-year debt drew a record low yield. Yuan Strength The yuan strengthened 0.36 percent to 6.3948 per dollar in Shanghai, breaching the 6.40 level for the first time since China unified official and market exchange rates at the end of 1993. The central bank raised its reference rate for the currency by 0.27 percent to 6.3991, the biggest advance since November. Zinc led gains in metals, rising 3.9 percent and nickel jumped 3.2 percent as the strengthening yuan may boost demand in China, the biggest user of the metals. Corn climbed 0.9 percent before the U.S. Department of Agriculture’s monthly crop report that may show reduced production because of hot weather. The cost of protecting European corporate bonds from default rose, reversing an earlier decline, according to traders of credit-default swaps. The Markit iTraxx Crossover Index of swaps linked to 40 companies with mostly high-yield credit ratings increased 11.5 basis points to 624, the highest since June 2010. Nikkei Average About three companies declined for every two that rose on MSCI’s Asia Pacific Index, which lost 0.4 percent. The gauge pared an earlier drop of 2.4 percent. Japan’s Nikkei 225 Stock Average lost 0.6 percent, while South Korea’s Kospi Index gained 0.6 percent, reversing losses of as much as 4 percent. Telstra Corp. jumped 5.7 percent after Australia’s largest telephone company posted second-half earnings that beat analyst estimates. “Equity futures are still the key drivers for foreign- exchange markets and S&P futures are up, helping to see risk bid from the lows,” said Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong. We’re seeing a “weakening in safe havens” like the dollar, yen and franc, she said. The MSCI Emerging Markets Index rose for a second day, climbing 0.2 percent. Turkey’s ISE National 100 Index jumped 2.6 percent after the nation’s bourse announced new curbs on short selling and the central bank said the current-account deficit will narrow in the second half. The lira strengthened 0.6 percent against the dollar, while South Africa’s rand gained 1.5 percent and Russia’s ruble rallied 1 percent. To contact the reporter on this story: Claudia Carpenter in London at [email protected] To contact the editor responsible for this story: Justin Carrigan at [email protected]
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