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European Stocks Rise on U.S. Growth; Treasuries, Yen Drop

Published: March 16, 2012 | 11:31 am
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European stocks gained for a fourth day before U.S. data that may show consumers are the most upbeat in a year and factory output rose. Treasuries fell for an eighth day, the longest stretch since 2006, and the yen weakened.

The Stoxx Europe 600 Index advanced 0.4 percent at 10:45 a.m. in London, extending the highest level since July. Standard & Poor’s 500 Index futures rose less than 0.1 percent. The yield on the 10-year Treasury added three basis points to 2.31 percent, bringing the increase since the streak began to 37 basis points. The five-year German note yield climbed to the highest this year, while the yen depreciated against all but one of its 16 major peers.

U.S. industrial output probably climbed 0.4 percent in February and consumer sentiment increased for a seventh month, economists said before reports today. Treasury Secretary Timothy F. Geithner said yesterday rising oil prices show “we still face a dangerous and uncertain world” and there’s no easy way to lower gasoline costs.

“We spend a lot of time monitoring U.S. data and the way it’s developing positively over the past few months is very encouraging,” said Angus Gluskie, who manages more than $350 million as a managing director at White Funds Management in Sydney. “We are moving into the start of a more favorable upward spiral.”

Special Dividend
Three shares gained for every two that fell in the Stoxx 600. Subsea 7 SA, the oilfield-services provider formerly known as Acergy SA, rose 3.7 percent after declaring a special dividend and saying it will buy back shares. Porsche SE (PAH3) retreated 3.2 percent as Sanford C. Bernstein & Co. downgraded the sports-car maker.

Futures and options on equity indexes are expiring today in a process known as quadruple witching.

The S&P 500 closed above 1,400 for the first time in almost four years yesterday after reports showed jobless claims matched the lowest level in four years and manufacturing in the New York region expanded at the fastest pace since June 2010. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment may have reached 76 in March, according to the 67 estimates in a Bloomberg survey.

The 10-year Treasury note yield jumped 28 basis points in the week, on course for its biggest weekly decline in eight months. Irish 10-year bonds declined, with the yield rising five basis points after Finance Minister Michael Noonan said he expects to cut the government’s 1.3 percent economic growth forecast for this year when the government revises its figures next month, according to a ministry spokesman yesterday.

The German five-year yield rose two basis points to 0.99 percent, after reaching 1 percent, the highest since Dec. 12.

Default Risk
The cost of insuring European sovereign bonds rose for a second day, with the Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments climbing 1.5 basis points to 229.

The yen depreciated 0.2 percent to 83.74 per dollar, poised for its sixth consecutive weekly decline, the longest run since March 2009. The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, rose 0.1 percent.

The MSCI Emerging Markets Index (MXEF) fell 0.3 percent, trimming its weekly gain to 0.3 percent. India’s Sensex index fell 1.2 percent and Russia’s Micex Index (MICEX) lost 0.6 percent. China’s Shanghai Composite Index (IFB1) increased 1.3 percent, halting a two- day slide. The Philippine Stock Exchange Index (PCOMP) jumped 2.3 percent to close at a record high. Emerging-market equity funds lured $456 million for the week ended March 14, Citigroup Inc. analysts led by Markus Rosgen wrote in a report today, citing data compiled by EPFR Global.

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