By David Merritt Nov. 20 (Bloomberg) -- Stocks in Europe rose, rebounding from the steepest decline in a month. The yen gained and two- year Treasury yields held at the lowest level this year. Europe’s Dow Jones Stoxx 600 Index advanced 0.3 percent at 10:12 a.m. in London. The yen climbed, trading near a six-week high against the dollar. Two-year note yields were little changed at 0.7 percent, after dropping to 0.68 percent yesterday, the lowest level since December. Copper added 0.5 percent and zinc increased 1.4 percent. The Organization for Economic Cooperation and Development doubled its 2010 growth forecast for the leading developed countries to 1.9 percent yesterday. Asian stocks fell for a fourth day, their longest losing streak since July, while three- month Treasury bill yields dropped below zero for the first time since credit markets froze last year after Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., said there’s a “systemic risk” of new asset bubbles. “This strength of the yen and brief pullback in equities is likely to be temporary,” said Paul Robinson, a currency strategist at Barclays Plc in London. “No central banks of any importance are taking that liquidity away, and this is likely to support risky assets over the next few months.” Rising Valuations The 56 percent surge by Europe’s Stoxx 600 since this year’s low in March has pushed its valuation to more than 53 times reported earnings, near the most expensive level since June 2003. The MSCI World Index added 0.2 percent. TNT NV, Europe’s second-largest express-delivery company, and FLSmidth & Co. A/S, the world’s biggest maker of cement kilns, gained on analysts’ recommendations. Asian shares fell after Sony Corp. said it will take longer to reach its profitability targets. The MSCI Asia Pacific Index fell for a fourth day, the longest losing streak since July. Sony slid 2.4 percent in Tokyo. Standard & Poor’s 500 Index futures were little changed after two days of declines for the benchmark U.S. equities gauge. Dell Inc., the third-largest maker of personal computers, slid 6.2 percent in German trading after reporting earnings that missed analysts’ forecasts. Commodities may attract a record $60 billion this year as investors seek to diversify, Barclays Capital said. Copper for delivery in three months rose $35 to $6,830 a metric ton on the London Metal Exchange and zinc added $33 to $2,248 a ton. Crude oil fell 0.1 percent to $77.35 a barrel in New York. Gold, Rhodium Gold was little changed at $1,144.80 an ounce, within 0.7 percent of the record reached two days ago. Rhodium, used in catalytic converters, jumped 2.9 percent to $2,675 an ounce, for a weekly gain of 20 percent. The yen advanced 0.4 percent to 132.30 per euro and 0.2 percent versus the dollar to 88.84. The Japanese currency climbed against all but one of its 16 most-traded counterparts, weakening only versus South Africa’s rand. The pound dropped 0.6 percent to $1.6570 and weakened 0.3 percent to 89.84 pence per euro. The rand advanced 0.1 percent to 7.5263 per dollar, strengthening against all 16 most-actively traded peers. Policy makers from India, South Korea, and Indonesia say they are concerned too much money is flowing into their securities markets and driving currencies higher, which may prompt capital controls. Gross at Pimco said the Fed’s efforts to “reflate the economy” requires interest rates at a “painful level” that drives investors into higher-risk assets. Earlier this week, Federal Reserve Chairman Ben Bernanke said it’s “not obvious” that U.S. asset prices are out of line with underlying values. Russia, Poland Russia’s Micex Index climbed 0.7 percent as UBS AG lifted its price estimates for oil producers including OAO Lukoil, the country’s largest non-state oil company, and OAO Gazprom Neft. Poland’s WIG 20 Index jumped 1.5 percent as Citigroup Inc. recommended buying shares of PKO Bank Polski SA, Poland’s biggest lender, and Goldman Sachs Group Inc. increased its price estimate for the company. The yield on the two-year Treasury note was at 0.70 percent, within 2 basis points of its lowest level this year. Treasury three-month bill rates turned negative yesterday for the first time since December as investors were willing to pay for the safety of the shortest-dated U.S. government assets. To contact the reporter on this story: David Merritt in London at dmerritt1@bloomberg.net.

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