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 143.06, or 0.6 percent, to 24,854.76, from the record 24,997.82 close Nov. 26. Elsewhere in Latin America, Mexico's Bolsa rose 120.31, or 1 percent, to 12,196.39 . ``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.

Mexico's Bolsa rose to a record for a second day, as investors bet Mexican companies will report stronger profits in the last quarter of this year, said Jose Miguel Garaicochea, who manages 1.6 billion pesos ($140 million) in stocks with Santander D fund.

``I'd say the index will reach 12,600 by yearend,'' said Garaicochea, whose fund has returned 61 percent this year, compared with a 37 percent increase in the stock index. ``For next year I expect 13,000 by April and 13,900 by year-end, and I'm being conservative,'' he said in a telephone interview.

Mexican companies increased their earnings before interest, taxes, depreciation and amortization -- a measure of cash flow, called Ebitda -- by 20 percent in the last quarter compared with an average increase over the past 10 years of 5 percent, thanks to a stable economy and lower interest rates, he said.

The main stock indexes in Colombia and Peru rose, while the those in Argentina and Venezuela fell. The main index in Chile was little changed. Morgan Stanley's index of Latin American stocks was little changed, falling less than a point to 1363.93.

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 51 centavos, or 1.2 percent, to 41.89 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 1.5 reais, or 2.4 percent, to 62 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 1.33 pesos, or 2.2 percent, to 60.6 pesos, its highest level since April. The price of silver rose 2.1 percent to $7.825 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 68 centavos, or 2.7 percent, to 26.08 pesos. Andrew T. Campbell, an analyst with Credit Suisse First Boston, reiterated his ``outperform'' recommendation on the stock as competitive conditions are favoring America Movil's Telcel unit. 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. ``Competition with (Telefonica's) Moviles has provided a stimulus for stronger subscriber growth in Mexico without harming Telecel's average revenue per user and margins,'' said Campbell in a written report.

Chile

Cia. Acero del Pacifico SA (CAP CC), Chile's biggest steelmaker, rose 108.9 pesos, or 2.2 percent, to 4,984 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.

Concha y Toro SA (CONCHA CC), Chile's biggest wine exporter, rose 59.9 pesos, or 7.5 percent, to 859.9 pesos. Investpors expect the company to increase its earnings in the fourth quarter, said Francisco Montaner, general manager at brokerage Euroamerica Corredores de Bolsa SA in Santiago. Concha y Toro's earnings rose 38 percent to 7.7 billion pesos ($13.1 million) in the third quarter from a year earlier. Chile's exports rose 51 percent to $2.8 billion in October from a year earlier.

Colombia

Bancolombia SA (BCOLO CB), the largest Colombian bank, rose 100 pesos, or 1.4 percent, to 7,050 pesos. The Colombian currency has strengthened more than 12 percent this year against the dollar, prompting investors to buy peso securities, said Manuel Pineda, a trader at Profesionales de Bolsa SA in Medellin. The bank's planned tie-up with financial affiliates Banco Conavi and Suramericana de Inversiones SA further strengthens its earnings outlook, he said.

Valores Bavaria SA (VALBAVA CB), the largest diversified holding, rose 28 pesos, or 6.4 percent, to 468 pesos. Valores Bavaria plans to sell its 50 percent stake in Aerovias Nacionales de Colombia SA to OceanAir Linhas Aereas of Brazil under a plan that won approval from a New York bankruptcy court on Nov. 16.

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

Last Updated: November 29, 2004 17:37 EST