U.S Stock Futures Gain; Spain, Italy Two-Year Notes Fall

Stocks (SXXP) rose, sending the benchmark European gauge to a four-month high, and commodities gained as the yen weakened. Standard Chartered (STAN) Plc tumbled the most since at least 1988 after a U.S. regulator said the lender may face a suspension of business activities.

The Stoxx Europe 600 Index added 0.3 percent at 8:10 a.m. in New York, after falling 0.3 percent. Standard & Poor’s 500 Index futures advanced 0.4 percent. Standard Chartered slumped 24 percent. The yen depreciated against all 16 of its major counterparts and the Dollar Index lost 0.2 percent. Germany’s 10-year bund yield rose six basis points. Copper climbed 1.1 percent and soybeans rose 0.9 percent.

Reports today showed German factory orders declined more than twice as much as economists forecast in June as sales to euro-area countries slumped, and Italy’s economy contracted for a fourth straight quarter in the three months through June. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the European Central Bank, a spokesman said yesterday.

“The current thoughts are that the European situation is finally coming to a head,” said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers in London. Weak data from Europe will “prove positive in increasing the likelihood of definite action from the European authorities.”

Three shares rose for every two that declined in the Stoxx 600, with basic-resource and energy producers leading gains. Standard Chartered slid for a second day after a New York regulator said it may stop the bank from doing business in the state because it handled transactions for Iranian institutions that are subject to U.S. sanctions.

Elan Drops

Elan Corp. sank 13 percent to its lowest price this year. The Irish drugmaker wrote down to zero the value of its venture with Johnson & Johnson to develop an Alzheimer’s treatment.

Soybeans gained after the U.S. Department of Agriculture said yesterday that about 39 percent of the U.S. crop was rated poor to very poor, up from 37 percent a week earlier. Oil added 0.3 percent to $92.48 a barrel in New York.

The yield on the 10-year U.S. Treasury note rose three basis points to 1.60 percent before the government sells $32 billion of three-year notes, the first of three auctions this week totaling $72 billion.

Spain’s 10-year yield dropped three basis points while its two-year rate climbed 12 basis points. The yield on Italy’s 10- year bond fell 10 basis points, and similar-maturity Portuguese debt yields declined 35 basis points.

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net;

To contact the editor responsible for this story: Mark Gilbert at magilbert@bloomberg.net

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