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Business Title: Stocks, Commodities Advance on Outlook for Global Recovery June 14 (Bloomberg) -- Stocks rose for a fifth day, the longest streak since October for the MSCI World Index, and commodities rallied as growth in European industrial production added to signs the global economic rebound is strengthening. The euro appreciated, the yen weakened and Treasuries fell. The MSCI World gauge of stocks in 24 developed nations gained 1.7 percent at 11:10 a.m. in New York and the Standard & Poor’s 500 Index, which is trading near its lowest valuation in 15 months compared with estimated earnings, increased 1.1 percent to 1,103.97. Copper advanced for a fifth day, headed for the longest rally in five months, and oil jumped 2.7 percent. Ten-year Treasury yields increased 7 basis points to 3.31 percent and the euro strengthened to almost $1.23. Eighteen of 19 industries in the Stoxx Europe 600 Index rose after industrial production increased more than economists forecast in April, rising 0.8 percent for an 11th month of gains, the European Union said. The Federal Reserve may say on June 16 that output at U.S. factories, mines and utilities grew 0.9 percent last month after a 0.8 percent increase in April, according to economists surveyed by Bloomberg. “Stocks are so oversold it doesn’t take a whole lot to a get a rebound,” said E. William Stone, who oversees $104 billion as chief investment strategist at PNC Wealth Management in Philadelphia. “The U.S. economic recovery is in place. In Europe, we got positive industrial production data. On a day lacking negative news, it won’t be that hard to get a positive move.” Rally Extended The S&P 500 climbed for a third day and added to gains from last week’s 2.5 percent rally, its best since March. A Thomson Reuters/University of Michigan report last week showed improving U.S. consumer sentiment. Apple Inc., maker of the iPhone and iPad, rallied 1.7 percent and Chevron Corp. climbed 1.5 percent to pace gains in technology and energy companies. JetBlue Airways Corp. jumped 6.5 percent and American Airlines parent AMR Corp. rallied 2.2 percent after Deutsche Bank AG advised buying the shares. The Dow Jones Transportation Average rose 1.6 percent today and is up 7.1 percent in 2010, compared with a 1.5 percent year-to-date drop in the Dow Jones Industrial Average. Some traders watch the performance of airlines, railroads and trucking companies to gauge the outlook for the overall economy. Analysts have raised their average 2010 earnings growth forecasts for the S&P 500 to 32 percent from 26 percent at the end of March, according to data compiled by Bloomberg. The improving forecasts came even as the benchmark measure of U.S. equities retreated 13 percent between April 23 and June 4 amid concern some European nations will struggle to finance deficits. Bianco Eyes 1,300 The S&P 500 is trading at about 13.4 times analysts’ earnings estimates for the next 12 months, near the lowest level since March 2009, the month the benchmark index slumped to a 12- year low. “What we see is corporate profit growth in a very low- inflation, low-interest-rate environment,” David Bianco, head of U.S. equity strategy at Bank of America-Merrill Lynch, said in a Bloomberg Radio interview today with Tom Keene. “By year- end, we’ll be at 1,300” for the S&P 500. Federal Reserve Bank of St. Louis President James Bullard, speaking in Tokyo today, said Europe’s debt crisis shouldn’t cause the Fed to postpone raising interest rates as the economy recovers. The central bank has kept its benchmark lending rate at a record-low range near zero since December 2008 to foster growth. European Gains The Stoxx Europe 600 Index rallied 1.1 percent, while the MSCI Asia Pacific Index climbed 1.5 percent to the highest in almost four weeks. BHP Billiton Ltd. and Rio Tinto Group climbed more than 2.4 percent in London. Axa SA, Europe’s second-biggest insurer, rose 2.7 percent in Paris after saying it’s in talks to sell part of its U.K. life insurance unit to Clive Cowdery’s Resolution Ltd. for 2.75 billion pounds ($4 billion). BP Plc, struggling to contain its oil spill in the Gulf of Mexico, slipped 9.5 percent to a 13-year closing-basis low of 354.5 pence in London. The company faces a U.S. deadline today for a plan to raise oil-containment capacity as President Barack Obama demands an escrow account for damages claims related to the worst environmental disaster in the nation’s history. Developing-nation stocks rose for a fifth day, the longest winning streak in two months, with the MSCI Emerging Markets Index gaining 1.7 percent. Benchmark gauges in Taiwan, South Africa, Thailand and Qatar advanced at least 1.2 percent. Won Rallies South Korea’s won strengthened 2 percent against the dollar after policy makers said they will give banks time to meet a new ceiling on forward contracts, holding off from imposing controls on capital flows. Copper futures for July delivery rose 7.5 cents, or 2.6 percent, to $2.979 a pound on the Comex in New York, poised for the fifth straight gain, the longest rally since early January. The metal climbed 3 percent last week. Crude oil futures for July delivery increased 2.7 percent to $75.79 a barrel on the New York Mercantile Exchange. The yield on the two-year Treasury note increased three basis points to 0.76 percent, and the 30-year bond yield rose seven basis points to 4.22 percent. German 10-year bunds fell, with the yield advancing six basis points to 2.63 percent. The Belgian 10-year yield jumped 10 basis points to 3.45 percent. Flemish nationalists took the lead in Belgium’s general elections, setting up coalition talks with French-speaking Socialists who face demands from Dutch-speaking voters to give more powers to the nation’s regions. The cost of protecting corporate bonds from default fell in the U.S. and Europe. The Markit CDX North America Investment Grade Index Series 14, which investors use to hedge against losses or speculate on creditworthiness, declined 3 basis points to a mid-price of 122.4 basis points, according to Markit Group Ltd. In Europe, the Markit iTraxx Crossover Index of credit- default swaps on 50 mostly junk-rated companies fell 21 basis points to 575, the lowest in 1 1/2 weeks. The yen dropped 0.1 percent to 91.75 per dollar, and weakened 1.5 percent against the euro to 112.68. The euro strengthened 1.4 percent to $1.2287.
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