By Daniel Hauck Aug. 14 (Bloomberg) -- Stocks and commodities rose for a third day on speculation that earnings growth will accelerate as the global economy recovers from the first recession since World War II. The MSCI World Index of 23 developed nations climbed 0.2 percent to a 10-month high at 10:05 a.m. in London, led by Swatch Group AG after the world’s largest watchmaker said sales “show signs of recovery.” Copper reached a level not seen since October on the London Metal Exchange, and oil advanced for a third day in New York. Swatch Group and 1,196 other companies in the MSCI World that reported results since July 8 have exceeded analysts’ estimates by an average of 13 percent, data compiled by Bloomberg show. U.S. industrial production probably gained for the first time in nine months in July, a report may show today. Economists estimated that U.S. consumer prices fell the most since 1950. Data this week indicated that recessions in Hong Kong, Germany and France ended last quarter. “An earlier and stronger-than-expected recovery in global growth alongside still loose liquidity conditions and improving financial market conditions means that risk assets are likely to continue to perform strongly,” Lee Hardman, an economist at Bank of Tokyo-Mitsubishi UFJ in London, wrote in a report. ‘Positive Trend’ The Dow Jones Stoxx 600 Index of European shares climbed 1.6 percent. Swatch Group increased 8.8 percent in Zurich after the maker of Omega watches said sales and operating profit in May and June improved from the first four months of the year, and the “very positive trend” continued in July. First-half profit declined 28 percent, beating analysts’ estimates. Commodities producers advanced with metals and oil. Rio Tinto Group, the world’s third-largest metals producer, increased 2.7 percent in London. Futures on the Standard & Poor’s 500 Index added less than 0.1 percent. The MSCI Emerging Markets Index added 0.4 percent for its fifth consecutive weekly gain. Turkey’s ISE National 100 Index jumped 1.4 percent on speculation the central bank will cut interest rates next week to bolster the economy. Copper for delivery in three months gained 0.7 percent to $6,425 a metric ton on the London Metal Exchange. Aluminum and nickel also advanced for a third day. Crude oil for September delivery rose 0.7 percent to $71 a barrel on the New York Mercantile Exchange. Confidence Improves Confidence in the world economy surged to a 22-month high in August on signs the global recession is approaching an end, a Bloomberg survey of users on six continents showed this week. Output at U.S. manufacturers, mines and utilities climbed 0.4 percent in July, according to the median forecast in a Bloomberg News survey before today’s report from the Federal Reserve. Labor Department figures may show the monthly consumer- price index was unchanged last month after gaining 0.7 percent in June. The annual figure may show prices posted their biggest drop since January 1950, the survey showed. Hong Kong’s gross domestic product rose a seasonally adjusted 3.3 percent in the second quarter from the previous three months, after dropping 4.3 percent in the first quarter, the government said today. Figures yesterday showed that the economies of Germany and France unexpectedly grew in the second quarter from the first, each expanding by 0.3 percent. European government bonds rose for the fifth straight day, as the European Union statistics office in Luxembourg said European consumer prices dropped by 0.7 percent in July from the year-earlier period. The yield on the 10-year German bund dropped 4 basis points to 3.39 percent. The two-year note yield fell 2 basis points to 1.35 percent, on course for its biggest weekly decline in almost two months. The yield on the 10-year U.S. Treasury note increased 1 basis point to 3.61 percent. Borrowing costs for developing economies dropped 4 basis points to 3.66 percentage points, the first decline since Aug. 7, according to JPMorgan Chase & Co.’s EMBI+ Index. To contact the reporters on this story: Daniel Hauck in London at dhauck1@bloomberg.net.

Source