Stocks gained with emerging markets advancing for a fifth day while US futures rose as the global economy and corporate earnings improved. Oil retreated for the first time in three days, and German bunds stayed lower after the European Central Bank kept interest rates on hold.
The Stoxx Europe 600 Index added 0.8 per cent at 7:50 am New York. The MSCI Emerging Markets Index increased 1 per cent, extending the longest rally in two months, and Standard & Poor’s 500 Index futures climbed 0.9 per cent. Brent crude dropped 0.8 per cent to $115.44 a barrel, while wheat advanced for a second day. German two-year notes declined, pushing the yield to its highest since August 2009.
Anheuser-Busch InBev NV and Adecco SA posted better-than estimated earnings, South Korea’s industrial output topped projections and the Federal Reserve said yesterday the US labour market improved. US jobless claims probably stayed below 400,000 and service industries expanded, reports may show, a day before monthly payrolls data. ECB President Jean-Claude Trichet may signal his readiness to raise rates as record food prices stoke concern inflation is accelerating.
The results season has showed “high profit margins and low leverage,” Jan Loeys, the New-York based chief market strategist at JPMorgan Chase & Co., wrote in a report on Thursday. “The bullish force of a zero return on cash, combined with fading medium-term uncertainties, remains in place and keeps us significantly long equities to bonds.”
AB Inbev, BSkyB
About five stocks advanced for every one that fell in Europe’s Stoxx 600. AB InBev, the world’s largest brewer, surged 2.8 per cent and Adecco, the biggest supplier of temporary workers, rallied 6.2 per cent. British Sky Broadcasting Group Plc gained 2.7 per cent to the highest price since 2002 after Rupert Murdoch’s News Corp. won UK government approval for its 7.8 billion-pound ($12.7 billion) bid to take full control of the company.
South Korea’s Kospi Index jumped 2.2 per cent, the biggest rally in almost six months, and the won strengthened 0.7 per cent versus the dollar for the top gain among emerging-market currencies. Industrial production rose 13.7 per cent in January from a year earlier, Statistics Korea said on Thursday, topping the 12.4 per cent median estimate in a Bloomberg survey.
Turkey’s ISE National 100 Index rallied 2.1 per cent after Credit Suisse Group AG raised its recommendation on the equity market to “overweight” and a report showed the inflation rate fell to the lowest in four decades.
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Jobless claims
The gain in S&P 500 futures indicated the US gauge will advance for the fourth time in five days. A Labor Department report at 8:30 am in Washington may show 395,000 workers filed applications for unemployment insurance payments last week compared with 391,000 the previous period, according to the median economist forecast in a Bloomberg survey. The data comes before tomorrow’s monthly jobs report, which is forecast to indicate payrolls rose by 195,000 workers in February after a 36,000 gain the previous month.
At 10 am, the Institute for Supply Management’s non- manufacturing gauge may show US service industries maintained a pickup in growth last month. The median forecast in a Bloomberg survey of economists for the ISM’s non-manufacturing gauge is 59.3 after a 59.4 reading in January that was the highest since 2005. Figures greater than 50 signal expansion.
Oil fell 0.7 per cent to $101.56 in New York after reports that Venezuela offered to mediate a resolution to the crisis in Libya, which has cut crude supplies from Africa’s third-biggest producer. Food prices rose to a record in February, the United Nations said on Thursday. Wheat gained 0.6 per cent and rice jumped 2 per cent.
ECB meeting
The German 10-year bund yield rose four basis points to 3.23 per cent, climbing for the fifth straight day, the longest run of increases since December. Two-year yields advanced to as much as 1.60 per cent.
ECB officials meeting in Frankfurt kept interest rates at a record low on Thursday. Trichet will hold a press conference at 2:30 pm local time, at which he may give an indication of the bank’s future intentions. Spanish five-year bonds declined, snapping a three-day gain, even after borrowing costs fell at a sale of the securities. Investors bid for 2.17 times the securities offered, compared with a bid-to-cover ratio of 2.1 at a previous sale in January, the nation’s debt management office said on Thursday. The notes were sold at an average yield of 4.389 per cent, down from 4.542 per cent at the earlier sale.