Oct. 11 (Bloomberg) -- Brazil's benchmark stock index rose for a third day on prospects that a growing economy will increase earnings. Tele Norte Leste Participacoes, the stock with the heaviest weighting of the index, led the gain.

The Bovespa index of the 57 most-traded companies in the Sao Paulo stock exchange rose 337.01, or 1.1 percent, to 30,614.23.

Brazilian industrial production rose more than expected in August as companies increase capacity to meet demand for home appliances and cars, the government said Oct. 6. Output by miners and manufacturers rose 3.8 percent from a year earlier, accelerating from July's 0.6 percent growth and exceeding the 2.8 percent median forecast in a Bloomberg survey of 17 economists.

``The outlook is still very good'' for earnings, said Roberto Rocha, sales director for Latin America at Deutsche IXE LLC.

The Bovespa may rise to 39,000 by 2006 yearend, said Marcelo Mesquita, equity strategist with UBS AG. Average earnings before interest, taxes, depreciation and amortization of Brazilian companies probably will increase 15 percent in 2006, he said in a report dated yesterday.

The Bovespa trades at 7.7 times its price per estimated 2006 earnings, compared with an average of 10.1 times for emerging markets, he said.

In other markets, Argentina's Merval fell 11.94, or 0.7 percent, to 1643.96, led by Tenaris SA, the biggest maker of seamless steel pipes for oil industry, following a drop in international oil prices from August's record level.

``Tenaris is suffering the consequence of the drop in international oil prices,'' said Sebastian Di Nucci, portfolio manager at InvertirOnline.com brokerage in Buenos Aires. ``Tenaris is one of the companies with the heaviest weight in the index and is lagging the rest of the companies.''

Oil futures contracts have declined 11 percent since reaching a record $70.85 a barrel on Aug. 30, the day after Katrina made landfall.

Di Nucci said the index is also falling because investors' concern about an accelearing inflation in the country.

Consumer prices rose 10.3 percent in the 12 months through September after increasing 9.7 percent in August, the National Statistics Institute said last week. Prices rose 1.2 percent in September from the previous month.

In Mexico, the Bolsa was little changed, falling 21.04, or 0.1 percent, to 15,445.37. The index has gained 20 percent this year.

``Strong third-quarter earnings and expectations that Mexico will continue cutting interest rates will prop up the Bolsa,'' said Carlos Gonzalez, an equity strategist with Ixe Grupo Financiero SA in Mexico City.

Wal-Mart de Mexico SA Latin America's largest Retailer, said Oct. 7 that third-quarter profit rose 34 percent. Mexico's annual inflation rate fell to a record in September, fueling speculation that the central bank will cut interest rates further to bolster the economy, the government reported Oct. 7.

Elsewhere in the region, the main indexes in Peru and Colombia rose, while Venezuela's index fell. The Chilean index was little changed. Morgan Stanley's index of Latin American stocks rose 0.8 percent to 2000.58.

The following stocks are making significant gains or losses in Latin American markets today. Symbols are in parentheses after the company name.

Brazil

Telemar (TNLP4 BS), Brazil's largest telephone company, rose 85 centavos, or 2.4 percent, to 36.85 reais. The company said it plans to buy $150 million of bonds from investors, taking advantage of rising sales to reduce its debt.

Cia. Vale do Rio Doce (VALE5 BS), the world's largest iron-ore producer, rose 98 centavos, or 1.2 percent, to 82.50 reais. Vale produced a record amount of the mineral last month, Chief Executive Roger Agnelli said. Shares in Vale also gained after Standard & Poor's gave the company an investment grade credit rating. Vale in July had its debt rating raised to investment grade by Moody's Investors Service.

Caemi Mineracao e Metalurgia SA (CMET4 BS), a unit of Vale, rose 7 centavos, or 2.1 percent, to 3.49 reais.

Petroleo Brasileiro SA (PETR4 BS), the state-controlled oil company, rose 60 centavos, or 1.9 percent, to 32.10 reais. Petrobras is among the companies in UBS's suggested portfolio. Together with mining companies these shares ``are poised to continue to benefit from the Chinese secular growth story,'' Mesquita said.

Argentina

Tenaris SA (TS AR) fell 85 centavos, or 2.3 percent, to 36.40 pesos.

Petrobras SA (PBE AR), Argentina's second-biggest oil company, fell 5 centavos, or 1.2 percent, to 4.22 pesos. The company has fallen 8.5 percent so far this month.

Mexico

Grupo Mexico (GMEXICOB MM), Mexico's largest copper producer, rose 19 centavos, or 0.9 percent, to 20.91 pesos. Copper prices rose to a record in New York for the seventh session on increasing demand. Futures for December delivery rose 2.90 cents, or 1.6 percent, to $1.835 a pound on the Comex division of the New York Mercantile Exchange.

America Movil SA (AMXL MM), Latin America's biggest mobile- telephone company, rose 9 centavos, or 0.7 percent, to 13.22 percent. The company controlled by Carlos Slim plans to spend more than $100 million by yearend in Peru to accelerate expansion in the Andean country, Humberto Chavez, who heads the local unit, said during a briefing in Lima yesterday.

Impulsora del Desarrollo y el Empleo en America Latina SA (IDEAL MM), the infrastructure developer that was split off from Slim's bank, Grupo Financiero Inbursa SA, rose 28 centavos, or 3.5 percent, to 8.36 pesos. The company has risen 43.1 percent since its debut on Sept. 15. Shares of Inbursa (GFINBURO MM) have fallen 9.5 percent since Sept. 15.

To contact the reporter on this story: Telma Marotto at at tmarotto1@bloomberg.net;

Last Updated: October 11, 2005 17:25 EDT