Global Markets Flicker Optimism And Uncertainty

Stocks rose, trimming a second week of declines, and U.S. index futures climbed as Europe took steps to address its debt crisis. Italy’s bonds gained and oil reached a three-month high.

The MSCI All-Country World Index increased 0.7 percent at 8:20 a.m. in New York, after falling 3.1 percent in the past two days. Standard & Poor’s 500 Index futures advanced 1.1 percent. The euro appreciated 0.4 percent to $1.3659. The yield on the Italian 10-year bond declined 27 basis points. Oil in New York approached $100 a barrel.

Italy’s Senate approved a key-budget bill today, paving the way for a new government led by former European Union Competition Commissioner Mario Monti, while Greece will swear in Lucas Papademos to head a unity government. U.S. Treasury Secretary Timothy F. Geithner said yesterday Europe’s plan to deal with its crisis is a “good framework.” American consumer confidence probably rose for a third month, economists said before a Thomson Reuters/University of Michigan report.

“Progress in the formation of new governments in Italy and Greece could support optimism,” fixed-income strategists at UniCredit SpA led by Michael Rottmann in Munich wrote in an investor note today. “However, uncertainty remains high.”

The Stoxx Europe 600 Index climbed 1.3 percent as all 19 industries advanced. A gauge of European banks rebounded 1.6 percent from two days of losses as BNP Paribas SA of France, the Royal Bank of Scotland Group Plc and the National Bank of Greece SA jumped more than 4 percent. Telecom Italia SpA gained 5.2 percent after third-quarter profit beat analysts’ estimates.

Disney Earnings

The advance in U.S. index futures signaled the S&P 500 will rise for a second day. Walt Disney Co. (DIS) increased 3.7 percent in pre-market trading after the owner of Mickey Mouse and Marvel Entertainment LLC posted fourth-quarter earnings per share that exceeded estimates. A report from Reuters/University of Michigan, scheduled for 9:55 a.m. New York time, may show that consumer confidence increased in November, according to a survey of 67 economists. Trading in U.S. Treasuries was closed for the Veterans’ Day holiday.

The extra yield investors demand to hold Italy’s 10-year debt instead of German bunds, Europe’s benchmark government securities, dropped 31 basis points after climbing to a euro-era record 575 basis points two days ago. The French-German spread narrowed two basis points after S&P corrected an erroneous message to subscribers yesterday that suggested the nation’s AAA credit rating had been lowered.

Euro-Era High

The Greek two-year yield rose to a euro-era high of 110.80 percent. The cost of insuring European sovereign debt fell, with the Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments dropping four basis points to 340.

The euro strengthened against 11 of its 16 major counterparts. The U.S. currency fell against a majority of its peers, with the Dollar Index dropping 0.4 percent.

West Texas Intermediate oil climbed as much as 0.8 percent to $98.53 a barrel, the highest since Aug. 1. Copper rose 0.5 percent. China, the biggest buyer of industrial metals, will focus on domestic growth to boost the world economy, Vice Finance Minister Wang Jun said in Honolulu.

The MSCI Emerging Markets Index climbed 1.2 percent. The Hang Seng China Enterprises Index in Hong Kong advanced 1.3 percent, Hungary’s BUX jumped 1.9 percent and Brazil’s Bovespa gained 1.4 percent. The Kospi Index (KOSPI) rose 2.8 percent after South Korea left interest rates unchanged, while India’s Sensitive Index lost 1 percent as the nation’s factory output slowed. Funds investing in developing-nation stocks took in $2.1 billion in the week ended Nov. 9, Citigroup Inc. said, citing data compiled by EPFR Global.

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