International News On European Stocks Future And U.s. Manufacturing Development

International News On European Stocks Future And U.s. Manufacturing Development

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European stocks rose for a fourth day, with the Stoxx Europe 600 Index headed for its highest close since August, as a report showed that manufacturing in the U.S. expanded in December at the fastest pace in six months.

BHP Billiton Ltd. and Rio Tinto Group jumped at least 6 percent, leading gains by commodity producers as copper increased in London. Automakers rallied as R.L. Polk & Co. said the number of cars and light trucks sold globally will grow 6.7 percent this year. Marks & Spencer Group Plc advanced 1.7 percent as Bank of America Corp. upgraded the stock.

The benchmark Stoxx 600 rose 1.3 percent to 250.25 at 3:47 p.m. in London, heading for its highest close since Aug. 3. The gauge has risen for four days, its longest winning streak since November. The U.K., the U.S. and Swiss markets were closed for a holiday yesterday.

'The new year has bearish expectations for growth baked in, providing an equity-buying opportunity for investors as growth improves later in the year,' said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich. 'The market will focus on improving growth increasing profits, low interest rates benefiting businesses and investors will see equity as a more attractive alternative than holding cash.'

The Stoxx 600 rallied 1.1 percent yesterday as a measure of German manufacturing beat estimates. The gauge posted its first yearly decline since 2008 last year as U.S. leaders wrangled over cutting the deficit and euro-area policy makers remained divided on their response to the sovereign-debt crisis.

European Budget Rules

National leaders have pledged to draft a stricter rulebook for controlling government spending. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin on Jan. 9 to work out the details.

The Institute for Supply Management's factory index rose to 53.9 last month from 52.7 in November. That beat the median projection of 63 economists surveyed by Bloomberg News before the report. Fifty is the dividing line between growth and contraction. Construction spending in the world's largest economy increased in November, another report today showed.

A separate report on Jan. 6 will probably show that hiring in the U.S. accelerated in December for a second month, a sign that the country's improving labor market will bolster consumer spending in early 2012, economists said. Payrolls climbed by 150,000 workers after rising 120,000 in November, according to the median forecast of 62 economists in a Bloomberg News survey before the Labor Department release on Jan. 6.

'U.S. data has continued to impress and markets are expecting the trend to persist,' Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a research note today.

European Debt Sales

France sold 84-, 161- and 315-day treasury bills today. The 10-year yield increased four basis points to 3.28 percent as of 2:05 p.m. London time, rising for a fifth consecutive day. Two- year yields added two basis points to 0.87 percent.

German unemployment fell in December more than economists had forecast as exports of cars and machinery boomed and one of the mildest winters on record helped support jobs in construction.

'The main focus is that there will be no recession,' said Robert Halver, head of research at Baader Bank AG in Frankfurt. 'It can be a good year for equities under the condition that European politicians do their homework. The European Central Bank is in the driving seat.'

National benchmark indexes advanced in 16 of the 18 western-European markets. Germany's DAX Index added 1.4 percent, while the U.K.'s FTSE 100 Index climbed 2 percent. France's CAC 40 Index gained 0.1 percent.

BHP Billiton, the world's biggest mining company, surged 6.2 percent to 1,993.5 pence, while Rio Tinto, the second- largest, soared 6 percent to 3,313 pence. Copper, tin and zinc advanced on the London Metal Exchange.


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