BLBG: Yen Drops on German Business Confidence; Oil Gains
By Stuart Wallace
Dec. 18 (Bloomberg) -- U.S. and European stocks advanced and the yen fell as German business confidence rose to a 17- month high and technology companies reported improved earnings.
The Standard & Poor’s 500 Index added 0.6 percent to 1,102.74 at 9:49 a.m. in New York, while the Dow Jones Stoxx 600 Index of European shares increased 0.3 percent. The yen weakened against 13 of its 16 most-traded counterparts. Crude oil rose as much as 2.8 percent after Iranian forces surrounded an oil well in Iraq. Treasuries fell as gains in commodities fueled speculation inflation will accelerate.
The Munich-based Ifo institute’s business climate index rose to 94.7 this month, above the 94.5 median forecast of 33 economists surveyed by Bloomberg. Oracle Corp., the world’s second-biggest software maker, reported profit that beat estimates while Research In Motion Ltd. forecast higher sales.
“The IFO data are an additional support for European markets,” said Markus Steinbeis, head of equity portfolio management at the German unit of Pioneer Investments, which oversees about $221 billion globally. “Companies are optimistic, at least for the first quarter of 2010.”
Technology companies led gains in U.S. stocks as the S&P 500 trimmed its weekly loss to less than 0.5 percent. Oracle rose 5.2 percent in and Research in Motion, maker of the BlackBerry, surged 11 percent.
Treasuries declined, sending the yield on the 10-year note up three basis points to 3.50 percent.
Gross Shift
Bill Gross, who runs the world’s biggest bond fund, cut government debt holdings and boosted cash to the most since Lehman Brothers Holdings Inc. collapsed in 2008 amid increasing speculation that interest rates will rise. Gross, who manages the $199.4 billion Total Return Fund at Pacific Investment Management Co., increased cash to 7 percent in November from negative 7 percent in October, according to Pimco’s Web site.
Crude oil rose 2.3 percent to $74.34 a barrel in New York trading. Iranian forces yesterday entered Iraqi territory at dawn, and occupied Well Number 4 in the east Maysan field, Border Guard General Zafer Nazmi said. The Iranian forces positioned tanks around the well. The border guard’s comments could not immediately be verified with officials in Iraq and Iran.
Gold for immediate delivery added 0.3 percent to $1,102.47 an ounce.
The MSCI World Index of 23 developed nations’ stocks was little changed following declines in Asia. Iliad SA climbed 4 percent in Paris after Morgan Stanley upgraded France’s third- largest provider of broadband services to “overweight.” Credit Agricole SA, France’s largest bank by branches, sank 6.6 percent after Bank of America Merrill Lynch Global Research cut its recommendation on the stock to “neutral.”
Asian Shares Slip
The MSCI Asia Pacific Index retreated 0.5 percent. Industrial & Commercial Bank of China Ltd. slid 1.7 percent in Hong Kong after Fitch Ratings said Chinese banks’ capital strength is probably “strained.” The Shanghai Composite Index fell 2.1 percent, the steepest decline among equity gauges.
The MSCI Emerging Markets Index fell for a fourth day, losing 0.5 percent. Developing-nation equity fund inflows slowed in the week to Dec. 16, with 2010 poised to be a more “testing year” amid waning stimulus measures worldwide, according to Cambridge, Massachusetts-based EPFR Global. Investors added $571.4 million to the more than $75 billion attracted by developing-nation equity funds this year, a record high.
Yen, Swiss Franc
The yen fell 0.4 percent to 129.52 per euro and 0.4 percent to 90.35 against the dollar.
The Swiss franc climbed 0.4 percent to 1.4958 against the euro, surpassing 1.50 for the first time since March and igniting concern that the central bank may sell the currency. Nicolas Haymoz, a Swiss National Bank spokesman in Zurich, declined to comment on the franc’s move.
The SNB’s failure to act yesterday “gave the idea to the market that maybe the SNB doesn’t care anymore,” said Lutz Karpowitz, a currency strategist in Frankfurt at Commerzbank AG, Germany’s second-biggest lender. “It would be a risky game to bet on more franc strength.”
To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net
