Nov. 3 (Bloomberg) -- Brazilian stocks rose, rebounding from the biggest weekly loss in eight months, on higher commodity prices and the prospect faster economic growth will boost earnings of the biggest banks and industrial companies.

Itau Unibanco Holding SA gained 5.3 percent after its profit beat analyst estimates and it said it expects its loan portfolio to grow up to 25 percent in 2010. ALL America Latina Logistica, Latin America’s biggest railroad operator, rose more than 2 percent after Warren Buffett’s Berkshire Hathaway Inc. agreed to buy Burlington Northern Santa Fe Corp. Vale SA and Petroleo Brasileiro SA gained as prices of metals and oil rose.

“The index has been coming off of a few days of meaningful declines and today we’re seeing renewed interest in commodities, pushing up Vale and Petrobras,” said Mirela Rappaport, who manages $57 million at Investport in Sao Paulo. “As companies report earnings, which should be good, it will draw some attention after seeing a correction.”

The Bovespa index added 1.8 percent to 62,643.23. It has gained 67 percent this year. Markets were closed yesterday for a holiday. The BM&FBovespa SmallCap Index gained 0.7 percent. The real gained 1.1 percent to 1.7446 per U.S. dollar.

In other Latin American markets, Mexico’s Bolsa added 0.8 percent and Chile’s Ipsa advanced 0.2 percent. The MSCI Emerging-Markets Index fell 0.9 percent.

Brazil’s economy is “really growing at a fast pace,” central bank President Henrique Meirelles said today.

Latin America’s largest economy is on a “strong recovery path” and may grow 4.3 percent next year, Banco Bradesco SA said in a note to clients. The real may appreciate to 1.65 per dollar by the end of this year, Bradesco said.

ALL Rallies

A “better economic outlook in 2010 could be a positive for ALL results,” said Daniela Bretthauer, a Sao Paulo-based analyst at Raymond James & Associates.

ALL gained 4.3 percent to 13.55 reais.

Burlington Northern led a worldwide rally in railroad stocks, surging 28 percent, after Buffett made his “all-in wager” on the nation’s economic future.

“Any M&A movement in a specific industry ends up helping,” Rappaport said in a phone interview. “You create valuation parameters for the industry which can help. And of course you have the fact that ALL is one of the stocks that fell a lot in the past month.” ALL fell 4.9 percent last month as the Bovespa index rose 0.1 percent.

Banks Advance

Itau led gains for banks, rising 5.3 percent to 35.26 reais. Adjusted net income, excluding one-time events, was 2.69 billion reais, higher than the 2.37 billion reais average estimate of five analysts surveyed by Bloomberg News.

“Investors saw some synergy gains that were better than expected” from Itau’s takeover of Uniao de Bancos Brasileiros SA, said Francisco Meirelles de Andrade, who helps manage 520 million reais in assets at Nest Investimentos in Sao Paulo. “They’re expecting to get some better savings in the future.”

Bradesco, Brazil’s second-biggest non-government bank after Itau, rose 2.1 percent to 35.30 reais. Banco do Brasil SA, Latin America’s biggest lender, rose 3.1 percent to 29.08 reais. Banco Santander Brasil SA, the unit of Spain’s biggest bank, added 3.6 percent to 21.75 reais.

Vale climbed 3.8 percent to 40.96 reais. The Bloomberg Base Metals 3-Month Price Commodity Index gained for a second day today, adding 0.6 percent, for the first two-day advance since Oct. 15.

The world’s biggest iron-ore producer plans to sell benchmark bonds today in its second overseas dollar note offering this year, said a person familiar with the transaction.

“Vale, being a metal producer in a world that still wants to own commodity exposure, is very attractive,” said Eric Ollom, chief strategist for emerging markets at Jefferies Group Inc. in New York.

Real Outlook

Gerdau SA, Brazil’s biggest steelmaker, reversed earlier losses and added 1.2 percent as metal prices recovered. Gerdau added 31 centavos to 26.61 reais.

Petrobras rose 1.5 percent to 35.55 reais as crude prices gained 1.8 percent in New York.

The real has strengthened 33 percent this year, making it the best-performing emerging-market currency versus the dollar in 2009.

“Brazil is much more attractive because our growth rate is far superior than the U.S. or Europe’s,” said Darwin Dib, an economist at Itau Unibanco in Sao Paulo. “Besides, our assets are not denominated in dollars or euros and portfolio managers want to diversify beyond those currencies.”

The Brazilian currency may overshoot against the dollar if the government does not take further actions, said Dib.

Itau projects the real will finish the year at 1.7 per U.S. dollar.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.

Last Updated: November 3, 2009 16:58 EST