Nov. 29 (Bloomberg) -- Brazil's benchmark stock index fell from a record as a rise in yields on U.S. treasury notes reduced the allure of emerging market securities. Tele Norte Leste Participacoes, or Telemar, the stock with heaviest weighting in the index, led the drop.

The Bovespa index of the most-traded shares on the Sao Paulo stock exchange fell 312.25, or 1.3 percent, to 24,685.57 at 12:42 p.m. New York time, from the record 24,997.82 close on Nov. 26. Elsewhere in Latin America, Argentina's Merval fell 19.02, or 1.6 percent, to 1164.14.

``One of the reasons to buy Brazil and other emerging markets is the search for yield,'' said Eduardo Favrin, who helps manage about 2 billion reais ($727.8 million) at Fator Administracao de Recursos in Sao Paulo. ``The moment that yields on U.S. treasuries rise, it increases the attractiveness of the assets there and, consequently, our cost of opportunity rises.''

The benchmark 10-year U.S. Treasury fell, pushing its yield to a three-month high. The yield has risen 29 basis points this month, compared with an 8 basis-point decline in the yield on equivalent German debt.

U.S. investors, who were inactive the past two sessions for the Thanksgiving holiday, were expected to buy Brazilian stocks today, following the example of local investors who had driven the market higher, Favrin said. This expectation wasn't met as U.S. Treasury yields rose, prompting local investors to sell shares as well, he said.

In other markets, Mexico's Bolsa rose 94.20, or 0.8 percent, to 12,170.28. The main stock indexes in Colombia and Peru rose, while the main index in Venezuela fell. The main index in Chile was little changed. Morgan Stanley's index of Latin American stocks fell 0.5 percent to 1357.15.

The following stocks are making significant gains or losses in Latin American markets today. Symbols are in parentheses after the company name. In Brazil, the preferred share is usually the company's most-traded class of stock.

Brazil

Telemar (TNLP4 BS), the country's largest phone company, fell 90 centavos, or 2.1 percent, to 41.5 reais. The stock rose 5.1 percent last week, its largest weekly gain since mid-August. The company expects to list shares in its Contax Participacoes SA call center unit as soon as February, after it completes the spin- off of the business and accountants review the unit's books, Chief Financial Officer Marcos Grodetzky said.

Eletropaulo Metropolitana SA (ELPL4 BS), Latin America's biggest power Distributor, fell 2.3 reais, or 3.1 percent, to 71.2 reais, while Light Servicos de Eletricidade SA (LIGH3 BS), a unit of France's Electricite de France SA and the largest power distributor in Rio de Janeiro state, fell 2 reais, or 3.2 percent, to 61.5 reais.

Gustavo Gattass, analyst with UBS Warburg, reduced his ratings on power utilities such as Light, Eletropaulo and Centrais Eletricas Brasileiras SA in anticipation of the country's biggest-ever auction of electricity on Dec. 7.

``Although we should note that a strong outcome at the auctions is still possible if the generators in Brazil decide to cut back on the energy they offer at the auction, we now believe the energy auction outcome is more likely to disappoint than to surprise on the upside,'' the analyst wrote in a report.

Mexico

Industrias Penoles SA (PE&OLES* MM), the world's biggest silver miner, rose 1.23 pesos, or 2.1 percent, to 60.5 pesos, its highest level since April. The price of silver rose 2.3 percent to $7.845 an ounce on the Comex division of the New York Mercantile Exchange.

America Movil SA (AMXL MM), Latin America's biggest wireless telephone company, rose 50 centavos, or 2 percent, to 25.9 pesos. Andrew T. Campbell, an analyst with Credit Suisse First Boston reiterated his ``outperform'' recommendation on the stock. He also raised his expected price for America Movil's New York- traded stock in the next 12 months to $51, from a former forecast of $44. The New York-traded stock rose 2.5 percent today to $45.94.

Chile

Cia. Acero del Pacifico SA (CAP CC), Chile's biggest steelmaker, rose 104.9 pesos, or 2.2 percent, to 4,980 pesos. Investors expect steel prices to rise on demand from Asian countries, said Rodrigo Cristi, analyst at brokerage Alfa Corredores de Bolsa SA in Santiago.

To contact the reporters on this story: Telma Marotto in Sao Paulo at Tmarotto1@bloomberg.net

Last Updated: November 29, 2004 13:12 EST