Stocks advanced as U.S. equity markets resumed trading for the first time this week after Hurricane Sandy. Most European shares rose as airlines reported better-than-estimate earnings, the euro strengthened and gasoline climbed to a two-week high.
The Standard & Poors 500 Index increased 0.5 percent at 9:50 a.m. in New York. The Stoxx Europe 600 Index added less than 0.1 percent, paring gains of as much as 0.5 percent. Air France-KLM Group and Deutsche Lufthansa AG, Europes two biggest carriers, rallied more than 6 percent. The euro appreciated against 13 of its 16 major peers, while Norways krone rallied after the central bank said it wont buy foreign currency for the oil fund in November. The yield on 10-year Treasuries was little changed 1.72 percent. Gasoline jumped 4.5 percent.
U.S. stock markets and many government offices planned to open today after the biggest Atlantic storm in history caused flooding and blackouts along its 900-mile wide swath. Business activity in the U.S. contracted in October for a second month, according to a report today, following data yesterday that showed home prices rose by the most in two years. In Europe, finance chiefs are discussing ways of trying to put Greeces bailout plan on track.
Investors are braced for an exceptionally busy open, as three days of trading are combined into one in the U.S., Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. There is the additional feature of some likely window-dressing business, given today being the last trading day of the month and the end of the year for many mutual funds. There has been some encouraging economic data in the form of prices data.
Monthly Return
Todays advance trimmed this months decline in the S&P 500 to 1.6 percent. Internet and mobile-phone connections were limited on the floor of the New York Stock.
Sandy may reduce economic output by $25 billion in the fourth quarter, according to Gregory Daco, a U.S. economist at IHS Global Insight in Lexington, Massachusetts. That may lower the fourth quarter pace of growth to between 1 percent and 1.5 percent, from an estimate of 1.6 percent, he said.
International markets have concluded that Sandys effects on the U.S. economy may be less than feared, and the focus has swiftly shifted back to the search for yield, said Kit Juckes, head of foreign exchange research at Societe Generale SA in London. Many are afraid of getting left behind.
Apple Inc. declined 2 percent after Chief Executive Officer Tim Cook embarked on a sweeping management overhaul at the worlds most valuable company.
GM Gains
General Motors Co., the largest U.S. automaker, rose 3.6 percent after third-quarter profit topped estimates. Some 24 companies in the S&P 500 are due to report earnings today, according to data compiled by Bloomberg. Profit has exceeded projections at 72 percent of those that have released third- quarter results, while sales trailed estimates at 59 percent of firms, data compiled by Bloomberg show.
A business activity gauge from the Institute for Supply Management-Chicago Inc. increased to 49.9 this month from 49.7 in September. A reading of 50 is the dividing line between expansion and contraction. The median estimate of 54 economists surveyed by Bloomberg forecast it would rise to 51.
Three shares advanced for every two that fell in the Stoxx 600, bringing this months gain to 1.3 percent. The gauge is on course for five straight months of gains, the longest winning streak in six years.
Air France
Air France rallied 8.1 percent and Lufthansa rose 6.1 percent. BG Group Plc, the U.K.s third-largest natural-gas producer, tumbled 17 percent after saying delays in projects in the North Sea, Brazil and Egypt will hold back output growth next year. Barclays Plc sank 3.7 percent as revenue from the fixed-income arm of its securities unit missed estimates and the U.K. bank disclosed two additional regulatory probes.
The cost of insuring against default on corporate bonds fell for a second day, with the Markit iTraxx Europe index of credit-default swaps linked to 125 investment grade companies dropping two basis points to 127.
The euro rose 0.3 percent to $1.2992 and jumped 0.6 percent against the yen. Norways krone outperformed all its major peers, gaining 0.5 percent versus the euro. Norwegian policy makers left interest rates unchanged for a fourth meeting today, matching forecasts in a Bloomberg survey.
Italy Bonds
The yield on Italys 10-year bond fell three basis points to 4.97 percent, declining for a second day. Similar-maturity Spanish debt yields slipped five basis points to 5.62 percent.
U.S. government notes were set to deliver a third month of losses, the longest run since the last quarter of 2010, Bank of America Merrill Lynchs U.S. Treasury Master index showed.
Gasoline rose to $2.8506 a gallon, the highest since Oct. 17, copper gained as much as 1.5 percent, the biggest jump since Sept. 14. Gasoline is down 3.2 percent this month and copper has dropped 4.5 percent. The S&P GSCI gauge of 24 commodities slipped 3.9 percent for October.
Oil climbed 0.8 percent to $86.38 a barrel, trimming the biggest monthly decline since May, as refineries started resuming operations.
The MSCI Emerging Markets Index increased 0.5 percent. Russias Micex Index advanced 0.8 percent, Brazils Bovespa index rose 0.4 percent and the Shanghai Composite Index added 0.3 percent. Indias Sensex index gained 0.4 percent. South Koreas Kospi index jumped 0.7 percent as industrial output climbed for the first time in four months. Polands WIG20 Index increased 0.5 percent as a report showed the purchasing managers index beat estimates.
