Stocks, Euro, Greek Bonds Advance

Stocks, Euro, Greek Bonds Advance on Speculation of Bailout

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By Whitney Kisling and David Merritt

April 9 (Bloomberg) -- Stocks rose and Greek bonds rallied for the first time in two weeks on speculation Europe’s most indebted nation will get an international bailout to avert a default. The euro jumped 0.8 percent against the dollar.

Stocks and the euro briefly trimmed their advance as Fitch Ratings cut Greece’s debt ratings to the lowest investment grade, before resuming gains that sent the MSCI World Index of 23 developed nations’ stocks to near its highest in 18 months and the euro to its strongest versus the dollar in almost a week. The Standard & Poor’s 500 Index rose 0.4 percent at 11:34 a.m. in New York. The premium investors demand to hold Greek ten-year notes instead of benchmark German debt narrowed 29 basis points as European officials said they’re ready to come to Greece’s rescue if needed.

“They have to be given some help from Europe or the IMF at concessional rates,” billionaire investor George Soros said in an interview on Bloomberg Radio in Cambridge, England. “It is a make or break time for the euro and it’s a question whether the political will to hold Europe together is there or not.”

European Union officials are “ready to act” on financial assistance for Greece, European Commission spokeswoman Amelia Torres said in Brussels. U.S. stocks extended gains earlier as government data showed wholesale inventories rose more than forecast in February, a sign companies are increasing orders as sales climbed to the highest level in more than a year.

Greek Yields Retreat

Yields on Greek two-year notes fell 44 basis points to 6.93 percent after rising more than 200 basis points in the past three weeks. National Bank of Greece SA, the nation’s biggest lender, rallied 8.1 percent, snapping a three-day, 17 percent plunge.

Energy and consumer shares led the gains in U.S. stocks, with Exxon Mobil Corp. rising 1.2 percent and Walt Disney Co. advancing 2.3 percent.

Treasuries fell, paring weekly gains, as speculation Greece will avoid default reduced demand for the relative safety of U.S. government debt. The 10-year note’s yield rose 2 basis points, or 0.02 percentage point, to 3.91 percent.

The Dollar Index, which tracks the currency against six major trading partners, slid 0.7 percent to 80.981. The New Zealand dollar, Danish krone and euro led gains against the dollar, rising at least 0.9 percent. Only the Canadian dollar fell against the U.S. currency among the 16 most active counterparts tracked by Bloomberg.

Europe Rallies

The Stoxx Europe 600 Index climbed 1.1 percent as banks and commodity producers led gains by all 19 industry groups. The benchmark gauge of equities in 18 western European nations headed for its sixth straight weekly gain, the longest winning streak in a year. Givaudan SA, the world’s biggest maker of flavors and fragrances, surged 5.1 percent in Zurich after saying sales advanced.

The MSCI Asia Pacific Index rose 0.4 percent. Macarthur Coal Ltd. jumped 8.3 percent in Sydney after rejecting a A$3.64 billion ($3.4 billion) bid from New Hope Corp., which is vying with Peabody Energy Corp. and Noble Group Ltd. for control of the world’s biggest producer of pulverized coal.

Xstrata Plc, the world’s fourth-largest copper producer, rose 2.5 percent in London after saying it approached Macarthur shareholders Posco and ArcelorMittal about a potential rival bid.

Eastern Europe led a rebound in emerging-market stocks, with Hungary’s Budapest Stock Exchange Index gaining 1.5 percent and the Czech PX Index climbing 1.2 percent. The Micex Index in Russia advanced 1.4 percent while the ruble strengthened 0.9 percent against the dollar. Turkey’s lira added 0.6 percent.

Copper for delivery in three months rose 0.6 percent to $7,940 a metric ton on the London Metal Exchange. Aluminum advanced to its highest level since October 2008. Gold for immediate delivery added 1 percent to $1,161.70 an ounce, for a fifth consecutive gain. Crude oil erased gains, slipping 0.5 percent to $84.97 a barrel in New York.