By Justin Carrigan and Paul Sillitoe Feb. 2 (Bloomberg) -- European stocks rose for a third day as mining shares rallied the most in two months, while U.S. index futures advanced. The Australian dollar dropped after the central bank unexpectedly left interest rates unchanged. The Dow Jones Stoxx 600 Index increased 0.4 percent at 1:20 p.m. in London as a gauge of 29 mining companies gained as much as 3.2 percent. Futures on the Standard & Poor’s 500 Index climbed 0.1 percent. Copper added 0.6percent on the London Metal Exchange. Australia’s currency weakened against all 16 of its most-traded peers. Commodities are rallying on speculation the dollar’s weakness will spur alternative investments as economic growth buoys demand for raw materials. The Dollar Index, a measure of the currency against those of the biggest U.S. trading partners, has fallen 8 percent in the last 12 months, while copper has doubled and oil is up 88 percent. Sales of existing U.S. homes may have stabilized in December after a record November plunge, economists estimated before a government report today. “The economic data and earnings remain very buoyant,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a research note. “There is no doubt that on calmer days where we receive no external shocks on Greece, financial reforms, or hints of tightening actions from China, the focus for markets turns to the good news.” Rio Tinto, BP Rio Tinto Group led gains in European stocks after Citigroup Inc. recommended shares of the world’s third-biggest mining company. BP Plc, Europe’s largest oil producer, slid the most in 11 months because earnings missed analysts’ estimates. The MSCI World Index of 23 developed nations’ stocks added 0.5 percent. The MSCI Asia Pacific Index gained the most in two weeks after U.S. manufacturing expanded. Canon Inc., a camera maker that gets about 28 percent of revenue from the Americas, climbed 2.7 percent in Tokyo. Toyota Motor Corp. gained 4.5 percent after the automaker said it will resume some production operations that were halted after recalling 2.3 million cars to fix faulty accelerator pedals. U.S. stock-index futures rose after the S&P 500 yesterday posted its biggest jump in a month. The number of contracts to buy previously owned U.S. homes was probably little changed in December after a record plunge a month earlier, according to the median of economists’ forecasts in a Bloomberg survey. The report is due at 10 a.m. in Washington. Earnings Rebound A record nine-quarter earnings slump for S&P 500 companies is projected to have ended in the final three months of 2009 with a 76 percent increase in profits. Almost 80 percent of the results released since Jan. 11 topped the average forecasts of Wall Street estimates, data compiled by Bloomberg show. Dow Chemical Co. reported today earnings per share of 18 cents, beating the average analyst estimate of 12 cents. The Australian dollar dropped 1.2 percent against the U.S. dollar and the yen after the Reserve Bank of Australia left its key rate at 3.75 percent, defying the forecasts of all 20 analysts in a Bloomberg survey and signaling policy makers want to gauge the strength of the recovery before raising borrowing costs again. Economists anticipate that the European Central Bank and the Bank of England will keep borrowing costs unchanged when they meet later this week. Central banks around the world are weighing how soon to withdraw economic-stimulus measures and raise interest rates from record lows. The BOE will decide Feb. 4 whether to increase a 200 billion-pound ($319 billion) program of asset purchases designed to revive the economy. Volcker Stand Paul Volcker, head of the U.S. Economic Recovery Advisory Board, is likely to repeat his call to prohibit commercial banks from owning hedge funds and limit their ability to trade for their own accounts when he testifies to the Senate Banking Committee. Copper for delivery in three months rose 0.6 percent to $6,820 a metric ton on the London Metal Exchange, leading gains in industrial metals. Gold for immediate delivery added 0.7 percent to $1,113.05 an ounce. Crude oil added 0.7 percent to $74.95 a barrel in New York. The MSCI Emerging-Markets Index climbed 0.5 percent as Russia’s Micex Index gained 0.8 percent and Abu Dhabi’s ADX Index advanced 0.8 percent. Romania’s BET index rose 0.4 percent as economists predict the central bank will lower its interest rate by half a percentage point tomorrow. Government bonds gained, erasing earlier losses, with the yield on the U.S. 10-year Treasury down 1 basis point to 3.64 percent. To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net

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