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European Stocks Rise Before ECB Loans as Italian Bonds, Oil Gain

Published: February 29, 2012 | 1:37 pm
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European stocks rose, on course for their longest run of monthly gains in a year, before the region’s central bank provides a second round of unlimited funds to support banks. Italian bonds jumped, oil snapped a two-day drop and the euro traded little changed.

The Stoxx Europe 600 Index climbed 0.3 percent at 9:50 a.m. London time, set for a third monthly gain. Standard & Poor’s 500 Index futures added 0.2 percent. The yield on the two-year Italian note slid 19 basis points. The euro was at $1.3461, approaching the highest level since Dec. 5. Oil in New York rose 0.5 percent, while silver for immediate delivery reached a five- month high, extending its increase this year to 34 percent.

The European Central Bank will probably allot 470 billion euros ($633 billion) in three-year funds, a Bloomberg News survey of analysts showed. The Federal Reserve publishes its Beige Book economic survey, with Fed Chairman Ben S. Bernanke testifying on monetary policy. The Dow Jones Industrial Average closed above 13,000 in New York for the first time since 2008. Apple Inc. gained after U.S. exchanges closed, rising to a price that would give it a $500 billion market value.

“Europe didn’t turn out as bad as the market was fearing because of the actions taken” by the ECB, said Nader Naeimi, a Sydney-based senior strategist at AMP Capital Investors Ltd., which manages about $100 billion. “Investor sentiment has gone from extreme pessimism to one of optimism.”

Third Monthly Gain

The Stoxx 600 headed for a monthly gain of 4.2 percent, its biggest advance since October, as companies from ITV Plc to Standard Chartered Plc rose after reporting full-year earnings that beat analysts’ estimates. The U.K.’s largest commercial terrestrial broadcaster jumped 6.8 percent, its biggest rally in almost four months, while Standard Chartered added 1.3 percent. Aberdeen Asset Management Plc slumped 5.5 percent as Credit Suisse Group AG sold shares in the company.

A Commerce Department report at 8:30 a.m. in Washington today will show that the gross domestic product of the world’s largest economy expanded at a 2.8 percent annual pace in the fourth quarter, according to economists surveyed by Bloomberg News. The Federal Reserve releases its Beige Book at 2 p.m. New York time. Bernanke gives semi-annual Humphrey Hawkins testimony to the House Financial Services Committee.

The yield on the 10-year Italian bond fell four basis points, with the difference in yield between the nation’s two- and 10-year securities widening to more than 300 basis points, or 3 percentage points. The German 10-year bund yield rose two basis points to 1.82 percent before the nation sells as much as 4 billion euros of the securities.

Default Risk Declines

The cost of insuring against default on sovereign debt fell to the lowest level in more than a week, and the benchmark gauge is heading for a second month of declines. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments dropped 3.5 basis points to 338.5

The euro rose 0.1 percent against the yen, and was little changed versus the Swiss franc, while the Dollar Index, which tracks the U.S. currency against those of six trading partners, was little changed at 78.223.

Silver gained as much as 0.9 percent to $37.2275 an ounce in London, the highest price since Sept. 22, and last traded up 0.4 percent.

The S&P GSCI gauge of 24 commodities climbed 0.4 percent to 706.38, the first gain in three days. Copper for three-month delivery advanced for a fourth day, gaining as much as 0.7 percent to $8,663.25 a metric ton on the London Metal Exchange.

Emerging Markets

Crude in New York climbed from the lowest in almost a week to $107.09 a barrel, and was poised for the first monthly gain in three.

The MSCI Emerging Markets Index rose 1.2 percent, headed for the highest level close since Aug. 3. The gauge has jumped 6.1 percent in February, its second consecutive monthly increase. Benchmark indexes gained more than 1 percent in Russia, South Korea, Indonesia and the Philippines. The Shanghai Composite Index dropped 1 percent on concern the government will retain measures to curb gains in housing prices this year. Asustek Computer Inc. jumped 7 percent in Taipei, helping the Taex Index gain 2 percent, after saying notebook shipments will increase 22 percent this year.

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