By Agency reporter

Friday, 19 Nov 2010

Stocks rose around the world as the euro strengthened and commodities snapped two days of losses on Thursday.

Ireland moved closer to a European Union-led financial bail-out and reports on jobless claims and manufacturing bolstered optimism in the United States economy.

The MSCI World Index gained 1.7 per cent at 10.10am in New York and the Standard & Poor’s 500 Index jumped 1.5 per cent. The euro climbed by 0.6 per cent against the dollar. The yield on the Irish 10-year bond slid three basis points and the cost of insuring Ireland‘s bonds sank. The drop in Treasuries sent the yield on the 10-year note up by five basis points to 2.93 per cent. Silver increased 3.8 per cent and oil added 1.5 per cent.

According to Bloomberg on Thursday, stocks are recovering from a rout that wiped more than $2tn off the value of global equities since the start of last week. Irish Finance Minister, Brian Lenihan, said the government could accept an aid package after talks with the EU and International Monetary Fund were concluded.

Fewer workers than forecast filed claims for US jobless benefits, while Philadelphia-area manufacturing topped estimates and General Motors Company returned to the stock market.

“The euro zone is not going to be a bankruptcy, a disaster, a contagion,” Hank Smith, chief investment officer at Haverford Trust Company, which manages about $6.5bn in Radnor, Pennsylvania, said.

“In the US, any improvement in the jobs picture is going to be very well received by the market. In addition, there was high demand for GM‘s IPO, which is a good reflection that capital markets are in better shape.”

The S&P 500 advanced for a second day, rebounding from an almost one-month low reached on November 16. GM, which went bankrupt last year after almost a century on the New York Stock Exchange, returned to public trading on Thursday following an initial share offering that raised more than $20bn. Its shares advanced by as much as 7.6 per cent.

Applications for unemployment insurance payments rose by 2,000 to 439,000 in the week ended November 13, Labour Department figures showed. Jobless benefits applications were projected to rise to 441,000, according to a Bloomberg survey.

The total number of people collecting unemployment insurance dropped to the lowest level in two years, while those receiving extended payments climbed.

Manufacturing in the Philadelphia region expanded in November to the highest level this year. The Fed Bank of Philadelphia‘s general economic index rose to 22.5 from one, a month earlier.

Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware. The gauge was forecast to increase to five, according to the median estimate in a Bloomberg News survey.

A separate report from the conference board showed an index of leading indicators rose for a fourth month.

The Stoxx Europe 600 Index rallied by 1.1 per cent, as more than six companies rose for every one that fell. Banco Santander SA, Spain‘s biggest lender, rose by 1.7 per cent. Rio Tinto Group, the world‘s third-largest mining company, also climbed by 2.6 per cent.

 

Source: Punch