U.S. stocks rose, extending a global rally, as investors speculated third-quarter earnings will top estimates and Australia’s central bank raised interest rates on signs of economic strength. The dollar weakened, boosting oil prices and sending gold to a record. Alcoa Inc. and Barrick Gold Corp. climbed at least 3.3 percent, while Exxon Mobil Corp. gained as crude oil traded above $71 a barrel. The MSCI World Index of 23 developed countries added 1.4 percent, the most in three weeks, as benchmark equity gauges for the U.K., Hong Kong and Italy jumped at least 1.5 percent. The Standard & Poor’s 500 Index advanced for a second day, adding 0.9 percent to 1,050.27 at 9:40 a.m. in New York. The Dow Jones Industrial Average gained 90.61 points, or 0.9 percent, to 9,690.36. Almost seven stocks rose for each that fell on the New York Stock Exchange. after being upgraded by UBS AG. “We are all very focused on the earnings season,” Mark Bronzo, a money manager at Security Global Investors, which oversees $21 billion in Irvington, New York, told Bloomberg Radio. “The markets are doing better as people anticipate earnings will be better than what’s expected. Basic-materials and industrials and select technology names are probably the places to be in the short-term.” U.S. stocks also advanced as President Barack Obama, responding to widening job losses, considers a mix of spending programs and tax cuts that would amount to an additional economic stimulus without carrying that label. Stimulus vs. Deficit “On the one hand, there’s spending and stimulus to the economy,” said Peter Jankovskis, who helps manage $1.4 billion at Oakbrook Investments in Lisle, Illinois. “But any extra spending at this point is an additional contribution to the deficit.” The Reserve Bank of Australia’s decision to boost the overnight cash rate target to 3.25 percent from a 49-year low of 3 percent followed the first expansion this year in U.S. service industries. Manufacturing in emerging markets increased the most in the past three months since the second quarter of 2008, according to the HSBC Emerging Markets Index of data from purchasing managers. Sustainable economic growth and low interest rates worldwide will spur a “multi-year” bull market in equities, led by developing nations, Fidelity International’s Anthony Bolton said in an interview on Bloomberg Television in Hong Kong. Earnings Season Alcoa is scheduled to release third-quarter results tomorrow, the first company in the Dow average to report earnings. General Electric Co. and Intel Corp. are among the S&P 500 companies that will release results in the next two weeks. Analysts’ estimates compiled by Bloomberg predict companies will report a ninth straight quarter of declining profits before returning to growth in the final three months of the year. Alcoa, the largest U.S. aluminum producer, added 3.3 percent to $13.86. Barrick increased 4.4 percent to $38.55. Gold futures advanced as high as $1,038 an ounce in New York, topping the previous record of $1,033.90, on speculation that inflation will accelerate and erode the value of the dollar, spurring demand for the precious metal as a store of value. Exxon Mobil, the largest U.S. oil company, rose 0.7 percent to $68.06. Billionaire hedge-fund manager T. Boone Pickens said Chinese purchases will lead to “tight” oil supplies. China’s Oil Demand China is “tying up” the world’s oil supply, Pickens said today on CNBC. The U.S. “can’t compete” with China-owned oil companies, he said. Corning Inc. added 3.4 percent to $15.32 after being upgraded to “buy” from “neutral” by UBS AG, which cited “more robust” sales in China and an eased glut of supply. The S&P 500 surged 32 percent in the last two quarters amid expectations the worst of a global recession is over. Lower- than-forecast data on manufacturing and jobs last week spurred concern the seven-month rally may have outpaced the prospects for earnings growth. Nobel Prize-winning economist Joseph Stiglitz said U.S. unemployment will keep rising and should be the focus for policy makers, and gains in the stock market show investors have been “irrationally exuberant” about a recovery. “There’s a lot of risk going ahead of some big bumps,” he said yesterday in a Bloomberg Television interview from Istanbul, citing housing, commercial real estate and consumers’ inability to pay off credit cards because of job losses. “There’s a very big risk that markets have been irrationally exuberant.” Mosaic, AIG Jump Mosaic Co. increased 4.9 percent to $48.23. The fertilizer maker expects potash demand to return to “normal” by the second half of its fiscal 2010 after plunging sales of the fertilizer contributed to a 92 percent decline in profit in the company’s first quarter. American International Group Inc. rose 1.7 percent to $43.46. The insurer bailed out by the U.S. government is near an agreement to sell its Taiwan life insurance unit to Primus Financial Holdings Ltd., people familiar with the matter said. Asia investment banking chief Robert Morse offered more than $2 billion for AIG’s Taipei-based Nan Shan Life Insurance Co., two of the people said. To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

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