Jan. 4 (Bloomberg) -- Treasuries held declines as stocks gained and economists said a report today will show improvement at U.S. factories. Investor demand for higher-yielding assets sent equities to levels not seen since 2008 and pushed gold and copper to record highs. An index of corporate debt yielded 2.49 percentage points more than Treasuries, the least in eight months, Bank of America Merrill Lynch data show. "This is going to be a pretty good year for the global economy," said Peter Jolly, the Sydney-based head of market research for the investment-banking unit of National Australia Bank Ltd., the nation's largest lender. "Yields will be higher than where they are now by the end of 2011." Ten-year rates increased one basis point to 3.34 percent as of 6:44 a.m. in London, based on BGCantor Market Data. The price of the 2.625 percent security maturing in November 2020 declined 2/32, or 63 cents per $1,000 face amount, to 94 1/32. The yield will climb to 4 percent by year-end, Jolly said. It rose four basis points, or 0.04 percentage point, yesterday. An index of Treasuries due in more than a year handed investors a 1 percent loss in the past month, according to figures compiled by Bloomberg and the European Federation of Financial Analysts Societies. Of 26 markets, only Spain, Italy, Greece and Portugal lost more as those nations try to convince investors they can control spending. The MSCI All Country World Index of stocks returned 3.5 percent in the month. It rallied to the highest since September 2008 yesterday. Gold futures contracts for February delivery closed at a record $1,422.90 yesterday. Copper futures contracts climbed to $9,728 a metric ton today, the most ever. Manufacturing, Jobs Bookings at U.S. manufacturers declined 0.1 percent in November, after a 0.9 percent decrease in October, according to a Bloomberg News survey of economists before the Commerce Department releases the figure today. The U.S. will say on Jan. 7 that the nation added jobs in December for a third month, a separate survey shows. Federal Reserve and government efforts to spur growth will push up U.S. 10-year yields to 3.53 percent by year-end, according to a Bloomberg survey of banks and securities companies, with the most recent forecasts given the heaviest weightings. The central bank is scheduled to buy $1 billion to $2 billion of Treasury Inflation Protected Securities maturing from July 2012 to February 2040 today as part of its plan to add $600 billion to the economy, according to its website. Policy makers are scheduled to issue the minutes from their last meeting today. Tax Cuts President Barack Obama last month signed into law an $858 billion bill extending for two years tax cuts to boost growth and add jobs. The tax plan made investors too optimistic on the outlook for growth, said Hiroki Shimazu, a Tokyo-based economist at Nikko Cordial Securities Inc., part of Sumitomo Mitsui Financial Group Inc., Japan's third-largest publicly traded bank by assets. U.S. gross domestic product will probably expand 2.8 percent in 2011, he said. The figure is short of the range of 3 percent to 3.5 percent predicted by Pacific Investment Management Co., which runs the world's biggest bond fund. "The optimism is a little bit overdone," Shimazu said. "Things will calm down, and the bonds will rise in the first quarter." Yields on 10-year securities will decline to 3 percent by March 31, he said. Clorox Co., the maker of Clorox bleach, cut yesterday the top end of its revenue forecast for the year and said sales across U.S. categories "remained soft." 'Too Aggressive' The economy isn't growing fast enough to lead the Fed to raise interest rates this year, Ajay Rajadhyaksha and Dean Maki, analysts at Barclays Capital Inc. in New York, wrote in a report yesterday. Bets on a rate increase have been "too aggressive," the report said. Barclays is recommending short-term bonds, those that are the most sensitive to expectations for what the Fed will do with its target for overnight loans. The company is one of the 18 primary dealers that are required to bid at the government debt sales. Two-year notes yield 36 basis points than the upper end of the Fed's range for its rate target. The spread was as wide as half a percentage points on Dec. 28, the most since June. Pacific Investment Management Co., based in Newport Beach, California, and Loomis Sayles & Co. in Boston are betting convertible debt will rally further this year as stocks rise and Treasuries fall. "You're starting to see for the first time interest rates tick up a little bit, and people are realizing what happens in their fixed-income portfolios when that takes place," said Justin Kass, a money manager who helps oversee $2.8 billion of convertibles at Allianz Global Investors Capital in San Diego. "We've been a big beneficiary of shifts in the past three months in terms of flows in our growth funds." --With assistance from Sapna Maheshwari and John Detrixhe in New York. Editors: Garfield Reynolds, Rocky Swift.

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