Stocks and Commodities Rally Over Europe Outlook and US Data

October 07 00:00 2011

New York, October 7 ( – A better than expected US economic data and the prevailing positive sentiment that Europe will be able to come out of its debt crisis, buoyed stocks and commodities for the second day.  Ahead of a European Central Bank rate meeting today, the euro maintained its value against the dollar and German 10-year bonds fell.

Standard & Poor’s 500 Index went up less than 0.1 percent, while the MSCI All Country World Index added 0.9 percent at 3:05 p.m. in Tokyo. Apple Inc. plunged 5.3 percent in German floor trading after news spread that co-founder Steve Jobs died. There was a rise of two basis points in yields on 10-year bonds that reached 1.86 percent. S&P’s GSCI Index of commodities rose 0.4 percent with copper jumping 2.2 percent. The euro traded at $1.3344 from $1.3348 yesterday.

The International Monetary Fund said that in order to contain the debt crisis, European Union Officials are formulating plans to bolster bank capital. After reports yesterday showed faster-than-forecast growth in payrolls and service industries, investors are looking forward to the employment data to estimate the strength of the US economic recovery.

Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne, said that “The market is a bit more optimistic about prospects for European policy makers to find a solution, particularly with the solvency of European banks.” He said that the latest US data is “a good sign” that the economy is stabilizing.