Jan. 12 (Bloomberg) -- Stocks rose, sending the MSCI World Index to the highest in more than two years, the euro strengthened and credit risk subsided on speculation European officials are stepping up efforts to solve the debt crisis. U.S. index futures advanced and commodities gained for a third day. The MSCI World added 0.7 percent at 9:50 a.m. in London, led by banks, as credit-default swaps on European financial companies dropped. Standard & Poor’s 500 Index futures increased 0.6 percent. The euro appreciated 0.4 percent against the dollar, climbing for the third consecutive day. Portuguese 10- year debt fell, with the yield rising six basis points, before a government auction of 2014 and 2020 securities. The S&P GSCI Index of commodities rose 0.7 percent, led by cotton. Europe’s bailout fund “should be reinforced and the scope of its activity widened,” the European Union Economic and Monetary Affairs Commissioner Olli Rehn wrote in the Financial Times. Japan may extend purchases of bonds by a European financial aid fund in coming months to support the recovery, said two government officials familiar with the matter. Portugal plans to sell as much as 1.25 billion euros ($1.6 billion) of debt, before tomorrow’s auctions by Spain and Italy. “The policy debate might be evolving towards a more forceful euro-wide response to the crisis,” Jacques Cailloux, a strategist at Royal Bank of Scotland Group Plc in London, wrote in a research note. “European policy makers might be finally starting to grasp the seriousness of the situation as Italy, Belgium and Spain show increasing signs of strains.” Santander, EADS The Stoxx Europe 600 Index advanced 1 percent as Banco Santander SA, Spain’s biggest lender, surged 5.9 percent and UniCredit SpA, Italy’s largest bank, jumped 5.2 percent. European Aeronautic Defence & Space Co. climbed 4.6 percent after its Airbus SAS unit won the biggest order in commercial aviation history, worth $15 billion at list prices. The cost of insuring European bank bonds using credit- default swaps tumbled from near a record high, with the Markit iTraxx Financial Index falling 8 basis points to 192, according to JPMorgan Chase & Co. Cotton jumped 2.2 percent before the U.S. Department of Agriculture’s monthly crop outlook. Palladium climbed 2.6 percent after Credit Suisse Group AG forecast prices may rise. The MSCI Emerging Markets Index rose 1.3 percent, the biggest gain on a closing basis in five weeks, as energy and raw-materials companies climbed. India’s Bombay Stock Exchange Sensitive Index advanced 1.9 percent as the slowest pace of industrial-production growth in 18 months eased concern of interest-rate increases. Thailand’s baht strengthened 0.4 percent against the dollar after the central bank raised its benchmark repurchase rate for the fourth time in seven months. --With assistance from Mark Gilbert, Abigail Moses, Michael Patterson, Andrew Rummer and Daniel Tilles in London. Editors: Stephen Kirkland, Justin Carrigan To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net. To contact the editor responsible for this story: Paul Sillitoe at psillitoe@bloomberg.net.

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