European Stocks Rebound

European Stocks Rebound, U.S. Futures Rise Before Jobs Report

By Stephen Kirkland

July 2 (Bloomberg) -- European stocks rose and U.S. futures gained, indicating the Standard & Poor’s 500 Index may rebound from a nine-month low even as economists forecast the American economy lost jobs last month. Copper rallied and the Swiss franc weakened.

The Stoxx Europe 600 Index increased 0.6 percent at 8 a.m. in New York, led by automakers. Futures on the S&P 500 Index gained 0.3 percent. Copper jumped 2.4 percent from a three-week low and zinc advanced 3.7 percent. The Swiss franc depreciated against all 16 of the most-traded currencies.

The recovery in stocks came after Europe’s benchmark index fell more than 5 percent on concern the region’s debt crisis and China’s efforts to contain inflation will undermine the global economy. While Bayerische Motoren Werke AG and Daimler AG reported U.S. sales increases of more than 15 percent in June, the Labor Department may say today that American employment fell for the first time this year.

“Leading indicators may be peaking, however valuations in most markets around the world are not bad,” said Friedrich Mostboeck, Vienna-based head of research at Erste Group Bank AG. “We are overall neutral in stocks.”

The gain in U.S. stock-index futures signaled the S&P 500 will advance for the first time this week. Payrolls declined by 130,000 last month, according to the median estimate of 82 economists surveyed by Bloomberg News. The report will also show the unemployment rate rose to 9.8 percent last month from 9.7 percent in May, according to the survey. The Labor Department is scheduled to release the data at 8:30 a.m. in Washington.

European Stocks

European stocks rebounded after this year’s slump left the Stoxx 600 index trading at 11 times reported earnings, the lowest level since 2008. Daimler climbed 1.8 percent in Frankfurt, and BMW rallied 1.1 percent.

Dana Petroleum Plc jumped 18 percent in London after the Scottish oil explorer said it received a takeover approach. BHP Billiton Ltd., the world’s biggest mining company, advanced 1.4 percent in London, while Rio Tinto Group rose 1.3 percent after the Australian government scaled back a proposed tax on the industry.

The MSCI Asia Pacific Index lost 0.2 percent after Goldman Sachs Group Inc. cut its forecast for China’s growth this year to 10.1 percent from 11.4 percent as government restrictions on lending and real estate slow expansion in the world’s fastest growing major economy.

Emerging Markets

Stocks in eastern Europe rose for the first time in four days, sending MSCI’s regional index to a 1.2 percent gain, after Poland’s central bank boosted its economic growth forecast and metals producers rallied. Economic growth in emerging markets means stocks are in a “bull phase,” even after the global benchmark MSCI Emerging Markets Index fell 13 percent from its 2010 high, according to investor Mark Mobius.

“We are happy with the correction,” Mobius, who oversees $34 billion in emerging markets at Templeton Asset Management Ltd., said at a briefing today in Paris. “We’ll be able to buy cheaper stocks.”

The Australian dollar strengthened 0.5 percent to 84.72 U.S. cents, and gained 0.9 percent to 74.52 yen. The Swiss franc declined 0.7 percent to 1.3363 per euro, and weakened 0.9 percent to 1.0688 against the dollar. The yen depreciated 0.4 percent to 87.95 per dollar.

Copper for delivery in three months advanced $152 to $6,482 a metric ton on the London Metal Exchange and zinc increased $64.25 to $1,804.25 a ton. Gold for immediate delivery was little changed at $1,205.70 an ounce. Crude oil lost 0.3 percent to $72.76 a barrel in New York.

‘Worst’ Over

Government bonds of so-called peripheral euro-area nations rose as concern abated that the countries may struggle to raise funds. The Portuguese 10-year bond yield fell 21 basis points to 5.44 percent, the lowest since June 14 based on closing prices. Spain’s 2020 bond yield dropped 4 basis points to 4.57 percent.

The “worst part” of the European debt crisis is over, Former European Commission President Romano Prodi said in a Bloomberg Television interview from Beijing today.

The yield on the 10-year Treasury note was little changed at 2.95 percent, holding below 3 percent for a fourth day.