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U.S. stock-index futures advanced as equity markets prepared to resume trading for the first time this week after Hurricane Sandy. European shares rose on better- than-estimate earnings from airlines, the euro strengthened and gasoline climbed to a two-week high.
Standard & Poor’s 500 Index futures increased 0.6 percent from last week’s close as of 7:39 a.m. in New York. The Stoxx Europe 600 Index jumped 0.3 percent as Air France-KLM Group and Deutsche Lufthansa AG, Europe’s two biggest carriers, rallied more than 6.5 percent. The euro appreciated against 13 of its 16 major peers and Norway’s krone rallied after the central bank said it won’t buy foreign currency for the oil fund in November. Treasuries fell, pushing the 10-year yield two basis points higher to 1.74 percent. Gasoline rose 3.5 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. probably expanded in October, economists said before a report today following data yesterday that showed home prices rose by the most in two years. In Europe today, finance chiefs will discuss ways of trying to put Greece’s bailout plan back 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.”
Three shares advanced for every one that fell in the Stoxx 600, bringing this month’s gain to 1.5 percent. The gauge is on course for five straight months of gains, the longest winning streak in six years.
Air France rallied 7.6 percent and Lufthansa rose 6.9 percent. 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 2.5 basis points to 126, the lowest in more than a week.
The increase in S&P 500 futures indicated the U.S. gauge will trim October’s 2 percent decline. 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 Sandy’s 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.”
The Institute for Supply Management-Chicago Inc.’s business barometer rose to 51 from 49.7 last month, according to the median forecast in a Bloomberg survey of 54 economists. A reading of 50 is the dividing line between expansion and contraction.
Walt Disney Co. rose 1.1 percent in German trading after agreeing to buy George Lucas’s Lucasfilm Ltd. for $4.05 billion in cash and stock, adding “Star Wars” and “Indiana Jones” to its movie roster.
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. General Motors Co., the largest U.S. automaker, rose 4.4 percent in German trading after third-quarter profit topped estimates.
The euro rose 0.4 percent to $1.3013 and jumped 0.7 percent against the yen. Norway’s krone outperformed all its major peers, gaining 0.4 percent versus the euro. Norwegian policy makers will leave interest rates unchanged for a fourth meeting today, according to all 14 economist estimates in a Bloomberg survey.
German 10-year bunds dropped a second day, with the yield increasing one basis point to 1.49 percent, while Spanish and Italian securities advanced.
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 Lynch’s U.S. Treasury Master index showed.
Gasoline rose to $2.8235 a gallon, the highest since Oct. 16, and oil climbed 0.9 percent to $86.43 a barrel. 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.
The MSCI Emerging Markets Index (MXEF) increased 0.5 percent. Russia’s Micex Index advanced 0.8 percent and the Shanghai Composite Index (SHCOMP) added 0.3 percent. India’s Sensex index gained 0.4 percent. South Korea’s Kospi index jumped 0.7 percent as industrial output climbed for the first time in four months, and Poland’s WIG20 Index increased 0.7 percent as a report showed the purchasing managers’ index beat estimates.
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