Stocks, Euro Trim Gains on Concern Over French, German Outlook

U.S. stocks and the euro trimmed gains, while Treasuries pared losses, as the Financial Times reported that Standard & Poor’s will put France and Germany on “creditwatch negative.”

The S&P 500 rose 1 percent to 1,256.91 at 2:03 p.m. in New York after climbing as much as 1.8 percent earlier. The Dollar Index was little changed at 78.624 after retreating as much as 0.6 percent, while the euro erased a gain of as much as 0.7 percent. Yields on 10-year Treasury notes climbed two basis points to 2.06 percent after rising eight points earlier.

S&P will release a statement later today, the FT reported. Earlier gains in stocks added to the biggest weekly gain since March 2009 for the MSCI All-Country World Index. The advance in equities and the euro came after Italian Prime Minister Mario Monti proposed budget cuts and Germany and France pushed for a new European Union treaty to fight the debt crisis.

The MSCI All-Country World Index posted a sixth consecutive day of gains, the longest winning streak since October, and the Stoxx Europe 600 rose for a second day. Italy’s FTSE MIB Index rallied 2.9 percent as Banca Monte dei Paschi di Siena SpA and Banco Popolare SC climbed more than 10 percent.