U.S. stocks rose, extending a worldwide rally, on speculation third-quarter earnings will top estimates and growing conviction the global economy is improving. The dollar slid after Australia unexpectedly raised interest rates, boosting oil and sending gold to a record. Alcoa Inc. and Newmont Mining Corp. climbed at least 3.5 percent, while Exxon Mobil Corp. gained 1.6 percent as crude oil traded near $71 a barrel. Corning Inc., the world’s biggest maker of glass for liquid-crystal display panels, added 4.7 percent on an upgrade at UBS AG. The MSCI World Index of 23 developed countries added 1.9 percent, the most in two months. “The stock market wants to go up,” said Keith Wirtz, chief investment officer at Fifth Third Asset Management Inc., which oversees $20 billion in Cincinnati. “Investors are braced for better-than-expected third-quarter earnings. And the rate hike in Australia suggests that global growth is back to positive territory.” The Standard & Poor’s 500 Index increased 1.4 percent to 1,054.72 at 4:07 p.m. in New York. The Dow Jones Industrial Average gained 131.5 points, or 1.4 percent, to 9,731.25. The 30-stock gauge has climbed 2.6 percent so far this week, its steepest two-day advance in almost three months. Five stocks rose for each that fell on the New York Stock Exchange. U.S. equities also advanced as President Barack Obama, responding to widening job losses, considered 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.” Gains in commodities came as the dollar slid to its weakest level in almost two weeks versus the euro and fell against most other major currencies as the Australian rate hike boosted demand for higher-yielding assets. The Reserve Bank of Australia’s decision to lift 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. Economic Recovery The U.S. economy is on the mend and housing is poised for a rebound, Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, told Bloomberg Radio. Economic growth will reach 3 percent next year, “maybe a little more,” LaVorgna said. Economists surveyed by Bloomberg News last month projected the world’s largest economy will expand 2.4 percent in 2010, according to the median estimate. 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 Dow and S&P 500 companies that will report 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 3.5 percent to $13.89. ‘Very Focused’ “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.” Producers of energy and raw-materials had the two biggest advances in the S&P 500 among 10 industries, rising 2.1 percent and 1.9 percent respectively. Gold futures advanced as high as $1,045 an ounce in New York, topping the 18-month-old record of $1,033.90, on speculation accelerating inflation will spur demand for the precious metal as a store of value. Crude oil rose to a two-week high, climbing 0.7 percent to $70.88. Newmont Mining, the largest U.S. gold producer, surged 7 percent to $46.21. Freeport-McMoRan Copper & Gold Inc., the world’s biggest publicly traded copper producer, gained 3.4 percent to $69.61. Exxon Mobil, the largest U.S. oil company, rose 1.6 percent to $68.66. Corning Rallies Corning added 4.7 percent to $15.50 after being upgraded to “buy” from “neutral” by UBS, 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 and is up 56 percent from a 12-year low in March amid expectations the worst of a global recession is over. Disappointing 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. ‘Big Bumps’ “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 Co. increased 4.2 percent to $47.89. 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. Hartford Financial Services Group Inc. had the biggest gain in the S&P 500, rising 7.9 percent to $28.32. The insurer that took a $3.4 billion bailout from the U.S. government was given a “buy” rating in resumed coverage at UBS AG, which said the company “has means to absorb adverse equity markets, higher statutory capital requirements, and investment losses.” AIG, Newspapers Climb American International Group Inc. rose 4.9 percent to $44.83. 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. Newspaper publishers gained for a second day after News Corp. Chief Executive Officer Rupert Murdoch said print and television advertising markets are picking up, the Wall Street Journal reported yesterday on its Web site. New York Times Co. rallied 5 percent to $8.20 after increasing 6.7 percent yesterday. Gannett Co. Inc. advanced 2.1 percent to $12.89. “Rupert Murdoch seeing advertising spending picking up is lifting those shares,” Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages about $2 billion in San Antonio. “There’s also some short covering on higher optimism.” Financial shares rose 1.2 percent collectively and earlier fell as much as 0.2 percent on speculation the recent rally in the group has been overdone. The S&P 500 Financial Index surged 3.3 percent yesterday after Goldman Sachs upgraded the biggest U.S. banks to “attractive” from “neutral,” saying share prices don’t reflect prospects for earnings growth. Banks Fluctuate The gauge of 79 banks, insurers and investment firms has rallied 146 percent from a 17-year low in March amid growing speculation that the worst of the credit crisis is over. Goldman Sachs Group Inc. rose 0.3 percent to $186.98 after declining as much as 1 percent earlier. Bank of America Corp. added 0.2 percent to $17, after dropping 1.5 percent earlier. Microsoft Corp. led technology shares up 1.9 percent for the third-biggest gain in the S&P 500. The world’s largest software maker will introduce an updated mobile-phone operating system today with a TV and Internet ad campaign, a bid to take back the spotlight from the BlackBerry and Apple Inc.’s iPhone. Microsoft rose 1.9 percent to $25.11. Boeing Co. was the worst performer of the Dow, rising less than 0.1 percent to $52.29 after earlier dropping 2.2 percent. The world’s second- biggest commercial-jet builder said it will take a $1 billion charge against third-quarter results because of increased production costs and the difficult market conditions affecting its 747-8 program. Ciena Corp. fell 7.9 percent to $13.05. The maker of fiber- optic gear for telephone companies offered $550 million to buy almost all the optical networking and carrier Ethernet assets from Nortel Networks Corp., said a person familiar with the situation. Ciena was also cut to “sector perform” from “outperform” by RBC Capital Markets. St. Jude Medical Inc. slumped 13 percent to $33.40 for the steepest drop in the S&P 500. The maker of devices to treat irregular heartbeats said sales were lower than expected in the third quarter.

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