Stocks, Commodities Rise on Stimulus Bets

Stocks rose, sending the Standard & Poor’s 500 Index to its first back-to-back weekly gain since April, as commodities and Treasuries advanced amid speculation central banks will take steps to boost growth as investors await Greek elections this weekend.

The MSCI All-Country World Index (MXWD) added 1.2 percent at 4 p.m. New York time, posting a second straight weekly gain. The S&P 500 increased 1 percent to 1,342.84, the highest level since May 11. The S&P GSCI Index of 24 raw materials added 0.1 percent. Yields on 10-year Treasuries dropped six basis points to 1.58 percent. The yen gained against 14 of 16 major peers.

Policy makers from the U.K. to Japan and Canada stepped up warnings about the threat to world financial markets should Europe fail to contain its debt crisis. Greek elections June 17 may determine whether the country upholds austerity measures attached to international aid and remains in the euro bloc. Reports on U.S. industrial production and consumer confidence trailed projections.

“There’s hope of some coordinated action if bad news does occur,” said Tim Ghriskey, who oversees about $2 billion as chief investment officer of Solaris Group in Bedford Hills, New York. “That seems to be supporting the stock market. Yet investors are still skittish. There’s the Greek election. It could be an ongoing process.”

All of the 10 main industries in the S&P 500 rallied as energy and technology shares had the biggest gains.

Microsoft, Facebook

Microsoft Corp. increased 2.3 percent as a person familiar with the matter said the company will announce plans next week to sell a table computer running the next version of Windows. IntercontinentalExchange Inc. advanced 4.7 percent after its bid for the London Metal Exchange was rejected in favor of Hong Kong Exchanges & Clearing Ltd.’s offer. Facebook Inc. rose 6.1 percent, completing the first weekly gain since it went public last month.

The Stoxx Europe 600 Index (SXXP) climbed 1 percent. Banks rebounded after the Bank of England said it will provide billions of pounds of emergency aid to U.K. lenders. Barclays Plc jumped 4.2 percent, Lloyds Banking Group Plc added 5.2 percent and Royal Bank of Scotland Group Plc surged 7.9 percent. The central bank will allow the lenders to swap assets for money they can loan to companies and households.

European Union leaders will press for new efforts to boost the area’s economy and improve lending conditions, according to a draft document prepared for a June 28-29 summit in Brussels. Steps include introducing so-called project bonds, making better use of EU infrastructure funds and increasing the capital, and therefore lending power, of the European Investment Bank, according to the June 12 draft.

Gold, Copper

Gold futures added 0.5 percent to $1,628.10 an ounce, rallying for a sixth straight day. Copper rose 0.9 percent to $3.3835 a pound. Natural gas slipped 1.1 percent after surging 14 percent yesterday.

Treasuries rose as lower-than-estimated economic reports reinforced speculation that the Fed will add to stimulus measures, stoking investor demand for the safety.

Industrial production in the U.S. unexpectedly fell in May for the second time in three months as factories turned out fewer vehicles and consumer goods. Output at factories, mines and utilities decreased 0.1 percent last month after a revised 1 percent gain in April, the Fed reported today in Washington. Economists forecast a 0.1 percent advance, according to the Bloomberg News survey median.

Confidence among U.S. consumers declined in June to the lowest level this year as the labor market showed few signs of improving. The Thomson Reuters/University of Michigan index of consumer sentiment fell to 74.1 from the May reading of 79.3, which was the highest since October 2007. The gauge was projected to fall to 77.5, according to a median forecast of 66 economists surveyed by Bloomberg News.

The yen strengthened the most in two weeks against the dollar after the Bank of Japan refrained from expanding monetary stimulus that debases the currency. The yen appreciated 0.8 percent to 78.68 per dollar, the biggest gain since May 31. It advanced 0.7 percent to 99.58 per euro.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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