Stocks, Oil Rise on Economy

Stocks, Oil Rise on Economy; Canadian Dollar Gains on Jobs

By Michael P. Regan and Stephen Kirkland

July 9 (Bloomberg) -- Stocks rose, with the MSCI World Index completing its biggest weekly rally in a year, and copper and oil gained on waning concern the global recovery will falter. Canada’s currency surged 0.8 percent versus the dollar after the nation’s jobs growth topped forecasts.

The MSCI gauge of 24 developed nations climbed 0.6 percent and the Standard & Poor’s 500 Index increased 0.7 percent to 1,077.94 at 4 p.m. in New York, with both extending their advances this week to more than 5 percent. Copper increased to an almost two-week high in New York. Ten-year Treasury yields climbed two basis points to 3.05 percent to cap the biggest weekly gain since April.

The S&P 500 rallied this week amid optimism that second- quarter earnings will justify the index’s rebound from a 10- month low on July 2. Profits at companies in the index are projected to have increased 34 percent in the April-June period, led by income growth at financial, energy and technology companies. French manufacturing grew in May, spurred by improving global trade and a pickup in output at car plants.

This week’s rally in stocks “buttressed our belief that the damage has been contained and that the recent reversal of fortune is poised to continue,” Richard Ross, global technical strategist at Auerbach Grayson & Co. in New York, said in a note to clients.

Alcoa Inc., the largest U.S. aluminum maker, is due to report earnings next week, the first company in the Dow Jones Industrial Average to announce results for the second quarter. Commodity, financial and consumer companies led gains in the S&P 500 today among 10 groups. Caterpillar Inc., Travelers Cos., Alcoa and Chevron Corp. climbed at least 2 percent to lead the Dow to its highest close since June 23.

Google China

Google Inc. rallied 2.4 percent to $467.49. The owner of the world’s largest Web search engine said the Chinese government renewed its Internet license, after the company submitted a revised application to meet regulations in the world’s biggest market by users.

Treasury 10-year notes had the biggest weekly decline since April as concern eased that the U.S. is slipping back into recession and the government prepared to sell $69 billion of notes and bonds.

The benchmark 10-year yield touched the highest level in almost two weeks after rising yesterday above 3 percent for the first time this month as stocks rallied. The U.S. will auction $35 billion of three-year notes on July 12, $21 billion of 10- year debt the following day and $13 billion of 30-year bonds on July 14.

Loonie Rallies

Canada’s currency, known as the loonie, strengthened 0.8 percent to C$1.0335 per dollar and touched the strongest level since June 23. Canada’s job creation was almost five times more than economists expected in June, restoring most of the country’s job losses since 2008 and bolstering the case for the central bank to raise interest rates for a second month. Canadian employment rose by 93,200 in June, following gains of 24,700 in May and April’s record 108,700, Statistics Canada said today in Ottawa.

The Stoxx Europe 600 Index rallied for a fourth day, climbing 0.6 percent to bring its weekly rally to 5.4 percent. Commodity producers led the advance, with Rio Tinto Group climbing 3.2 percent in London. Copper producer Antofagasta Plc surged 4.1 percent after Citigroup Inc. recommended buying the shares.

Copper, Oil

Copper rose 1.3 percent to $3.0535 a pound in New York and 2.2 percent to $6,760 a metric ton on the London Metal Exchange. Crude oil for August delivery climbed 0.9 percent to $76.08 a barrel.

Gold rose the most in three weeks on speculation that the lowest prices since May will revive demand for the precious metal. Gold futures for August delivery rose $13.70, or 1.1 percent, to $1,209.80 on the Comex in New York, the biggest gain since June 17. On July 7, the metal touched $1,185, the lowest level for the most-active contract since May 24.

The MSCI Emerging Markets Index climbed 1.2 percent today and 4.2 percent on the week, the biggest weekly advance of the year. China’s Poly Real Estate Co. led gains by developers after the Oriental Morning Post reported some Shanghai banks have resumed lending to third-home buyers.

South Korea’s won jumped 0.9 percent versus the dollar after the Bank of Korea unexpectedly raised its benchmark interest rate.

Emerging Markets

Emerging-market stocks will rally as much as 25 percent by the end of the year as the global economy avoids a “double dip” recession and attractive valuations lure investors, Citigroup Inc.’s New York-based strategist Geoffrey Dennis wrote in a research report dated yesterday.

A benchmark indicator of corporate credit risk in the U.S. fell for a sixth day amid expectations that European stress tests may reveal the extent of bank holdings of sovereign debt, providing clarity to investors.

Credit-default swaps on the Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, declined 0.8 basis point to a mid-price of 112.5 basis points as of 11:57 a.m. in New York, according to index administrator Markit Group Ltd. Earlier, the gauge fell as much as 2.2 basis points.