U.S. Stocks Increase, Dollar Trims Advance, Treasuries Rise

March 9 (Bloomberg) -- U.S. stocks rose, halting a global slide, and the dollar pared gains amid growing optimism an improving American economy will justify a yearlong rally in equities. Oil fell, pacing a retreat in commodities.

The Standard & Poor’s 500 Index climbed 0.2 percent to a seven-week high of 1,140.45 at 4:21 p.m. on the anniversary of its 12-year low in 2009. The Dollar Index advanced 0.2 percent to 80.565 after climbing as much as 0.5 percent. Crude slipped 0.5 percent from an eight-week high, trimming a drop of as much as 2.1 percent as the dollar weakened from its strongest levels of the day. Treasuries rose as a $40 billion auction of three- year notes drew a lower yield than forecast.

The S&P 500 has rallied 69 percent since March 9, 2009, as the Federal Reserve left its benchmark interest rate at a record-low range near zero to end the worst economic contraction since the Great Depression. The S&P GSCI Index of commodities has surged 55 percent over the same period.

“Momentum for stocks has been positive,” said Kevin Caron, a market strategist at Stifel Nicolaus & Co. in Florham Park, New Jersey, which has about $90 billion in client assets. “We’ve seen generally improving economic numbers. And on the international front, heightened fears about the European sovereign debt situation have abated.”

Telephone shares in the S&P 500 climbed 1.2 percent collectively for the top advance among 10 groups as Sprint Nextel Corp. rallied for a second day after saying revenue will grown and it will pay down debt and control expenses. American International Group Inc., the insurer rescued by the U.S., jumped 13 percent on speculation the firm may sell more assets as it raises cash to pay off the government.

Losses Recovered

The S&P 500 briefly erased gains in the final hour of trading after coming within 0.5 percent of a 15-month closing high of 1,150.23 reached on Jan. 19. The index has recovered most of an 8.1 percent plunge from that high triggered by concern some European countries won’t be able to pay back debt and speculation the Fed will need to rein in stimulus measures as the economy improves.

“We’re bullish on stocks,” said Linda Duessel, who helps oversee $390 billion as equity market strategist at Federated Investors Inc. in Pittsburgh. “We think the S&P 500 could reach the 1,300-or-better level during this year as more market watchers believe in the sustainability of this economic recovery.”

The MSCI World Index of 23 developed nations’ stocks slipped less than 0.1 percent, reversing a drop of as much as 0.5 percent.

European Shares

European stocks were little changed as the Stoxx Europe 600 Index recovered from a 0.8 percent decline. The gauge has rallied 63 percent since its 12-year low a year ago.

European Aeronautic, Defence & Space Co. fell 2.8 percent after the owner of airplane maker Airbus SAS said it plans to scrap its annual dividend after the company posted a yearly loss. Nestle SA, the world’s biggest food company, climbed 1.2 percent in Zurich after JPMorgan Chase & Co. raised its recommendation on the stock to “overweight” from “neutral.”

Most stocks in the MSCI Asia Pacific Index retreated. Fujitsu Ltd. declined for a second day in Tokyo, slumping 3.9 percent after altering its explanation for the resignation of its former president.

The 10-year Greek bond yield increased 4 basis points to 6.26 percent, with the premium investors demand to hold the securities instead of German bunds widening 7 basis points to 313 basis points, according to Bloomberg generic yields.

Papandreou and Obama

Greek Prime Minister George Papandreou said U.S. President Barack Obama expressed support for the measures being taken to deal with the fiscal crisis in Greece. Papandreou said after meeting with Obama at the White House that he also got a “positive response” from the U.S. president about European initiatives to curb market speculation and that the matter will be on the agenda for the next meeting of the Group of 20 nations.

The MSCI Emerging Markets Index climbed less than 0.1 percent after slumping as much as 0.5 percent earlier. Brazil’s benchmark Bovespa index rallied 1.5 percent as Petroleo Brasileiro SA and Vale SA climbed.

Chile’s peso slid for the first time in six days as a drop in copper curbed a rally that had been fueled by speculation the government will repatriate overseas savings to fund reconstruction after last month’s earthquake.

The peso weakened 0.7 percent to 512.23 per dollar. The currency is up 2.4 percent this month, the best performance among six major Latin American currencies tracked by Bloomberg. Chile was struck by an 8.8-magnitude earthquake on Feb. 27. The price of copper fell for a second day, losing 0.4 percent to $3.398 a pound in New York.

Crude oil for April delivery dropped 0.5 percent to $81.49 a barrel in New York, its first drop in three days. The S&P GSCI Index of commodities slumped 0.5 percent, also the first drop in three sessions.

To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net.