By Mark Gilbert March 3 (Bloomberg) -- Greek bonds rallied for a fourth day after Prime Minister George Papandreou announced plans to reduce Europe’s biggest deficit. The pound snapped its longest losing streak against the dollar since 2008. The yield on the 10-year Greek government bond declined 13 basis points to 6.03 percent at 12:02 p.m. in London. The pound strengthened after six days of losses. Futures on the Standard & Poor’s 500 Index were little changed. The MSCI Emerging Markets Index extended a four-day rally, the longest this year. The Stoxx Europe 600 Index slipped 0.1 percent as companies from Adidas AG to Holcim Ltd. reported earnings that disappointed investors. Greece announced an additional 4.8 billion euros ($6.6 billion) of budget cuts, including higher taxes and reduced salaries for civil servants, after European Union leaders called for greater austerity measures before considering aid. The announcement comes as Papandreou prepares to meet with Germany’s Angela Merkel and French President Nicolas Sarkozy this week. “Latest soundings out of Greece are on balance positive,” said Padhraic Garvey, head of investment-grade debt strategy at ING Bank NV in Amsterdam. “This is paving the way for more clarity on how Greece will maneuver its deficit lower and manage to fund existing needs.” Default Concern Eases Greek bonds rose, extending the longest run of gains since January. The extra yield investors demand to hold 10-year securities instead of benchmark German bunds declined 15 basis points to 290, the least since Feb. 11. The cost of insuring Greek government bonds against default fell, with credit swaps dropping 5 basis points to 315, according to CMA DataVision prices. The contracts soared to a record 428 on Feb. 4. The pound climbed 0.5 percent to $1.5054, snapping a six- day drop, the longest run of declines in 16 months. Sterling strengthened 0.3 percent to 90.63 pence per euro, its first gain in six days. The euro fluctuated against the dollar and the yen. U.S. stock-index futures were little changed after the S&P 500 rose for a third straight day yesterday to its highest level since Jan. 20. Service industries in the U.S. probably expanded at a faster pace in February, a sign that the pickup in manufacturing is mirrored in the rest of the economy, economists said before a report due at 10 a.m. in New York. The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, probably rose to 51 from 50.5, according to the median estimate of 72 economists surveyed by Bloomberg News. Another industry report, due at 9:15 a.m., may show companies cut jobs for a 25th consecutive month. Emerging Markets Gain The MSCI emerging markets gauge rose 0.5 percent, heading for the highest close since Jan. 21. The Bombay Stock Exchange Sensitive Index rose 1.4 percent after Nomura Holdings Inc. raised its growth forecast for India and a report showed the nation’s services industry expanded at the fastest pace in more than a year. Kazakhstan’s KASE Index climbed 0.5 percent while Egypt’s Hermes Index also rose 1.2 percent. The Stoxx Europe 600 Index was little changed after earlier falling as much as 0.5 percent. Adidas AG, the world’s second- largest sporting-goods maker, dropped 6.1 percent in Frankfurt after posting a 64 percent drop in profit. Puma AG, the second- biggest European sporting-goods maker, slipped 2.4 percent. Holcim Ltd. slid 1.9 percent in Zurich after the cement maker reported earnings that missed analysts’ estimates. The MSCI Asia Pacific Index gained 0.6 percent. National Australia Bank Ltd. rose 2.3 percent in Sydney as government data showed the economy expanded at the fastest pace in almost two years. Toyota Motor Corp. gained 3.2 percent in Tokyo after February U.S. sales beat analysts’ estimates. Copper for delivery in three months rose 0.3 percent to $7,516.75 a metric ton on the London Metal Exchange and zinc gained 0.7 percent to $2,272.50 a ton. Gold for immediate delivery added 0.4 percent to $1,139.4 an ounce. White sugar advanced 1.9 percent to $630.20 a ton in London. To contact the reporter for this story: Mark Gilbert at magilbert@bloomberg.net

Source