U.S. and European stocks climbed for a sixth day, commodities rallied and Treasuries declined as Alcoa Inc.’s forecast of growing global demand and Greece’s sale of debt bolstered optimism in the economic outlook. The Standard & Poor’s 500 Index rose 1.6 percent to 1,095.67 and the Stoxx Europe 600 Index increased 1.9 percent at 1 p.m. in New York. Oil surged 2.5 percent, recouping yesterday’s losses, and the S&P GSCI Index of commodities jumped 2 percent. Ten-year Treasury yields increased five basis points to 3.11 percent for a fifth straight gain, the longest streak in 11 months. The euro rose 0.9 percent to more than $1.27.
All 10 industries in the S&P 500 advanced as Alcoa’s earnings topped estimates and the company forecast global aluminum consumption will grow 12 percent this year, higher than a previous estimate of 10 percent. Equities also rallied as Greece sold 26-week Treasury bills at an interest rate below the 5 percent charged in the European Union’s rescue, signaling growing confidence.
“We’re kicking off earnings season with Alcoa out with numbers that beat -- there were a lot of folks who felt Alcoa was going to lose money,” said Hayes Miller, the Boston-based head of asset allocation in North America at Baring Asset Management, which manages $43.8 billion. “Greece being able to sell Treasury bills below the ECB rate suggests a bit of relief about what’s going in sovereign debt markets.”
Rebound From 10-Month Low
The S&P 500 has rebounded more than 7 percent from a 10- month low on July 2 amid optimism that second-quarter earnings will signal the economy is weathering Europe’s debt crisis and China’s efforts to slow growth and prevent asset bubbles. The Shanghai Composite Index sank 1.6 percent today, the most in two weeks, as China took steps to prevent speculation on housing.
Alcoa, the largest U.S. aluminum producer, rose 1.9 percent.
Intel Corp., which reports quarterly earnings later today, gained 1.8 percent. Profits for S&P 500 companies are projected to have increased 34 percent in the April-June period, according to analysts’ estimates compiled by Bloomberg. The period is forecast to mark a third straight quarter of increasing profits following a record nine-quarter slump, according to data compiled by Bloomberg.
“The market will carefully study expectations for earnings going forward,” said Peter Jankovskis, who helps manage about $2.2 billion as co-chief investment officer at Oakbrook Investments in Lisle, Illinois. “That’s what it is all about right now, whether the economic recovery is sustainable.”
European Gains
All 19 industry groups in Europe’s Stoxx 600 advanced, as more than 18 stocks rose for each one that fell. BP rallied 2.7 percent in London, and is up 35 percent since June 29, after it installed a cap on its leaking oil well in the Gulf of Mexico and Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan said the emirate is considering an investment in the company.
Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars, jumped 8.3 percent after raising its forecasts.
The MSCI Asia Pacific Index slipped 0.1 percent, while the MSCI Emerging Markets Index increased 0.5 percent. The Shanghai Composite posted the biggest retreat among major emerging markets after China said it will “strictly” enforce housing policies to prevent speculative investment.
Infosys Technologies Ltd., India’s second-largest software exporter, tumbled 3.4 percent in Mumbai, the most since September 2009, after profit trailed analysts’ estimates.
Pound Strengthens
The pound strengthened 0.8 percent to $1.5147 after a government report showed consumer prices increased 3.2 percent from a year earlier in June, more than the 3.1 percent median estimate of 27 economists surveyed by Bloomberg News. The euro strengthened against 10 of its 16 most-traded counterparts and the dollar declined against 14.
The Greek 2-year bond yield slipped eight basis points to 9.61 percent after the government sold 1.625 billion euros ($2.05 billion) of 26-week Treasury bills at a yield of 4.65 percent. Investors bid for 3.64 times the securities offered.
Portugal’s 10-year yield increased nine basis points to 5.47 percent after Moody’s Investors Service cut the nation’s bond ratings to A1 from Aa2. The yield premium demanded by investors to own Portuguese 10-year securities instead of benchmark German bunds climbed four basis points to 283 basis points.
Yields on 10-year U.S. Treasury notes were near a two-week high as the U.S. sold $21 billion of the securities.
Gold for immediate delivery climbed the 1.5 percent to $1,214.80 an ounce. Oil added 2.5 percent to $76.83 a barrel in New York, after falling 1.5 percent yesterday. Lead, nickel, tin and aluminum jumped at least 1.3 percent to lead industrial metals higher in London.
