By Nikolaj Gammeltoft and Justin Carrigan Feb. 9 (Bloomberg) — Stocks rallied, with emerging-market equities recovering from the worst three-day slide in a year, and the euro and commodities gained as European officials said they were considering financial assistance for Greece. Treasuries tumbled, while Greek bonds surged. The Standard & Poor’s 500 Index rose 1.6 percent at 1:53 p.m. in New York. The MSCI Emerging Markets Index increased 2 percent after falling 6.1 percent in the past three sessions. Greece’s ASE Index climbed 5 percent, rebounding from four days of losses. The euro strengthened the most in more than five months against the dollar, snapping four days of declines, and ended a three-day drop against the yen. Oil, copper and aluminum surged at least 2.2 percent to help lead gains in commodities. Germany is considering assistance for Greece after the country’s deficit threatened the stability of financial markets, two lawmakers from Chancellor Angela Merkel ’s governing coalition said. Olli Rehn , who takes over as European Union economic affairs commissioner tomorrow, said EU support for Greece will be discussed in coming days. “The markets are smelling a deal for Greece, and for that reason we’re seeing some stabilization,” said Robin Marshall , director of fixed income in London at Smith & Williamson Investment Management, which oversees about $20 billion. “It’s hard to see there not being one, given the potential fallout and contagion effect.” The S&P 500 erased yesterday’s 0.9 percent drop. The Dow Jones Industrial Average rallied above 10,000 after closing below that level yesterday for the first time since November on concern deteriorating European government finances will hurt economies elsewhere. Global Rebound The MSCI World Index of 23 developed nations’ stocks increased 1 percent, ending four days of losses. Europe’s Dow Jones Stoxx 600 Index climbed 0.1 percent. The regional benchmark erased most of a 0.7 percent rally after Fitch Ratings said Greece’s medium-term outlook remains “cloudy” and the U.K. needs to pledge further measures to rein in its budget deficit. The comments from German lawmakers Michael Meister and Frank Schaeffler indicating possible assistance for Greece came after equity markets closed in Europe. The 16-nation European currency climbed as much as 1.4 percent against the dollar, its biggest gain since Sept. 8. The euro appreciated 1.3 percent versus the yen and 0.2 percent compared with the British pound. Greek banks led the gains in European stocks as National Bank of Greece SA, the nation’s biggest lender, surged 7 percent in Athens, while Alpha Bank AE jumped 15 percent. The 10-year Greek government bond rose, with the yield falling 37 basis points to 6.40 percent. Brazil, Taiwan Rally Brazil and Taiwan shares led the advance among major emerging markets, with the benchmark Bovespa and Taiex indexes climbing more than 2 percent. Developing-nation currencies strengthened, led by a 1.7 percent advance in Brazil’s real against the dollar and a 2.2 percent gain in Poland’s zloty. The MSCI Asia Pacific Index increased 0.4 percent, gaining for the first time in four days. Nissan Motor Co. rose 2.4 percent after predicting a return to profit this fiscal year, scrapping an earlier loss estimate. Treasuries fell for the first time in four days. The yield on the 10-year note rose eight basis points to 3.64 percent. Default Swaps Drop The cost to protect against defaults on U.S. corporate bonds fell. Credit-default swaps on the Markit CDX North America Investment-Grade Index Series 13, which is linked to 125 companies, fell 6.5 basis points to a mid-price of 100.5 basis points as of 12:18 p.m. in New York, according to broker Phoenix Partners Group. It would be the biggest decline since Sept. 21 when it fell 10.7 basis points, according to CMA DataVision prices. The index typically falls as consumer confidence improves and rises as it deteriorates. Credit-default swaps on Greece fell 65.5 basis points to 360, the lowest level since Jan. 26, according to CMA DataVision prices. Optimism the country will be bailed out also sent credit-default swaps on European corporate bonds tumbling the most in three months, with the high-yield Markit iTraxx Crossover Index dropping as much as 32 basis points to 465, according to JPMorgan Chase & Co. Copper advanced 2.7 percent to $6,625 a metric ton in London. Gold for immediate delivery added 1.5 percent to $1,078.29 an ounce. Crude oil rallied 2.8 percent to $73.90 a barrel in New York trading. Orange-juice futures surged the most in four weeks, gaining 2.6 percent to $1.3775 a pound, after the U.S. Department of Agriculture cut its forecast for Florida citrus crops following a damaging cold snap last month. White sugar rose for a second day in London on speculation a global production shortfall may persist. Corn rose for a second day, gaining 0.8 percent to $3.587 a bushel, after the U.S. said demand from ethanol producers will be more than expected last month, eroding domestic inventories left over from the biggest crop ever. To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net
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Stocks, Euro, Commodities Rally on Speculation Greece Will Receive EU Help
