By Rita Nazareth and Stuart Wallace Dec. 30 (Bloomberg) -- The dollar climbed while most U.S. equities fell as signs of an improving economy added to speculation the Federal Reserve will withdraw stimulus measures. Treasuries were little changed after an auction of $32 billion of seven-year debt. The Dollar Index, which tracks the currency against six major U.S. trading partners, climbed 0.1 percent to 77.89 at 4:29 p.m. in New York and is poised for its first monthly gain since June. About four stocks fell for every three that rose on the New York Stock Exchange. The Standard & Poor’s 500 Index, which is up 25 percent in 2009 and headed for its biggest yearly rally since 2003, added less than 0.1 percent to 1,126.42. Gold for February delivery lost 0.5 percent to $1,092.50 an ounce. The Institute for Supply Management-Chicago Inc. said its business barometer rose to 60, exceeding economists’ estimates in a Bloomberg survey and reaching the highest level since January 2006. Fueled by government incentives and discount pricing, rising global demand has reduced stockpiles, which may prompt manufacturers to boost production into early 2010. “The economy is gaining momentum, which is positive,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which manages $8 billion. “However, the other side is that the Fed might be getting ready to take some action and tighten policy sooner rather than later. That will take some wind out of the stock market.” The MSCI World Index of stocks in 23 developed nations fell for the first time in three days, losing 0.6 percent. Commodity producers, this year’s best-performing group with a 58 percent advance, and industrial companies led the declines. Apple Inc. climbed 1.2 percent to a record $211.64, leading an advance in technology shares that sent benchmark U.S. indexes higher, after Kaufman Brothers LP boosted its share-price estimate. Australian, Canadian Currencies Currencies of raw-material producers weakened. The Canadian dollar, known as the loonie, declined against all 16 of its most-traded counterparts and the Australian dollar fell against 13 of 16. China led world economies out of recession this year, and the nation’s demand for raw materials spurred a 50 percent gain in the S&P GSCI index of 24 commodities, the best performance in almost four decades. Valuations on commodity stocks rose to a record, with the World Index’s materials group trading at almost 85 times reported earnings this month, according to data compiled by Bloomberg. “After strong gains over the past year, there’s a propensity to lock in profits and reposition for 2010,” said Mark Pervan, a senior commodity strategist at ANZ Banking Group Ltd. in Melbourne. Europe’s Dow Jones Stoxx 600 Index declined 0.4 percent. Basilea Pharmaceutica Ltd. slumped 15 percent, the most in 10 months, after the U.S. Food and Drug Administration rejected the Swiss biotechnology company’s experimental antibiotic for skin infections. The European equities index, which will be calculated for the last time this year today, rallied 28 percent in 2009, the biggest yearly gain in 10 years. Japan, Russia The MSCI Asia Pacific Index dropped 0.7 percent as Japan Airlines Corp. tumbled to a record low in Tokyo on speculation the carrier will file for bankruptcy. Asia’s biggest airline by sales fell 24 percent in Tokyo on concern it may seek bankruptcy. South Africa’s FTSE/JSE Africa All Share Index sliding 0.7 percent, Kazakhstan’s KASE Index down by 1.1 percent and Russia’s Micex Index losing 0.5 percent. Copper futures for March delivery climbed as much as 1.5 percent to a 15-month high of $3.362 a pound in New York on speculation a mine strike will disrupt supplies from Chile, the world’s largest producer of the metal. Treasuries were little changed, with the yield on the 10- year note slipping less than one basis point to 3.793 percent. The U.S. sold $32 billion of seven-year debt today, the last of three auctions this week totaling $118 billion. The government sold a record- tying $42 billion of five-year securities yesterday and $44 billion in two-year notes on Dec. 28. U.S. government securities have fallen 3.6 percent this year, according to Bank of America Merrill Lynch indexes, the worst annual performance since at least 1978, when Merrill began collecting the data. To contact the reporters on this story: Stuart Wallace in London at swallace6@bloomberg.net; Rita Nazareth in Sao Paulo at rnazareth@bloomberg.net.

Source