By
Stephen Kirkland and Michael P. Regan
U.S. stocks gained and European
shares erased earlier losses, while the euro reversed its
decline, as investors weighed potential changes to the
leadership of European nations reeling from the debt crisis.
The Standard & Poor’s 500 Index added 0.5 percent to
1,258.88 at 9:49 a.m. in New York. The Stoxx Europe 600 Index
increased 0.2 percent, reversing an earlier 1.8 percent decline.
The euro rose less than 0.1 percent to $1.3802, recovering from
a decline of as much as 0.8 percent. The Swiss franc depreciated
against all 16 of its most-traded peers on a report that the
nation’s central bank may move to weaken the currency. The yield
on the 10-year Italian bond rose to 6.49 percent after climbing
to as high as 6.68 percent.
Italy’s parliament will vote tomorrow on the 2010 budget
report as Prime Minister Silvio Berlusconi’s majority unravels.
Greek Prime Minister George Papandreou agreed yesterday to step
down, paving the way for the formation of a new government to
get international aid. European finance chiefs will meet in
Brussels today to work on a plan to raise the region’s bailout
fund.
The S&P 500 fell 2.5 percent last week, its first weekly
retreat since September. Amgen Inc. rallied 5.1 percent today
after saying it will repurchase as much as $5 billion in stock.
Jefferies Group Inc. surged 3.7 percent after saying it cut
gross holdings in sovereign debt of Portugal, Italy, Ireland,
Greece and Spain.
European Shares
Among European stocks, automobile companies and utilities
led gains. Carrefour SA dropped 2.8 percent after Citigroup Inc.
lowered its recommendation for the world’s second-biggest
retailer to “sell” from “neutral.” Sandvik AB, the largest
maker of metal-cutting tools, sank 1.6 percent after offering
6.19 billion kronor ($933 million) to buy the remaining shares
of its subsidiary Seco Tools AB.
Stocks and bonds pared losses after Giuliano Ferrara,
editor of newspaper Il Foglio and a former Berlusconi spokesman,
reported that the premier may step down within hours and push
for early elections. Berlusconi denied he’s stepping down, Ansa
said, citing comments from the premier.
Italy’s 10-year bond yield trimmed gains after climbing as
much as 31 basis points. The extra yield investors demand to
hold Italian 10-year bonds instead of German bunds, the euro
region’s benchmark government securities, widened to as much as
491 basis points, or 4.91 percentage points, the most since the
introduction of the euro in 1999, before retreating from the
day’s high and trading at 466 basis points.
Allies Defected
Two Berlusconi allies defected to the opposition last week,
and a third quit late yesterday. Six others called for
Berlusconi to resign and seek a broader coalition in a letter to
newspaper Corriere della Sera. More than a dozen more are ready
to ditch the premier’s coalition, Repubblica daily reported
yesterday, without citing anyone.
The yield on the 10-year Greek bond rose 123 basis points
to 27.99 percent, climbing for the sixth straight day, while the
two-year note yield touched a euro-era record. Papandreou and
Antonis Samaras, head of the main opposition party, agreed to
form a government to lead Greece “to elections immediately
after the implementation of European Council decisions on Oct.
26,” according to an e-mail from the office of President
Karolos Papoulias in Athens.
The yield on the 10-year German bund increased less than
one basis point to 1.83 percent, while the French 10-year yield
rose six basis points, driving the difference in yield between
the two securities five basis points higher to 128.
Ready to Act
The euro weakened 0.3 percent versus the yen.
The Swiss franc slid 1.3 percent versus the 17-nation euro
and the dollar. Policy makers remain ready to act in case the
franc’s strength increases the risk of deflation and threatens
the country’s economy, Swiss National Bank President Philipp Hildebrand told NZZ am Sonntag newspaper in an interview
conducted Nov. 2 and published yesterday.
Gold jumped as much as 1.6 percent to $1,784.20 an ounce,
the highest since Sept. 22. Lead and nickel decreased at least
0.9 percent. German industrial production slipped 2.7 percent in
September, more than the 0.9 percent decline predicted by 37
economists in a Bloomberg survey. Germany is the third-largest
user of copper, after China and the U.S.
The MSCI Emerging Markets Index of stocks rose 0.2 percent,
recovering from a 0.7 percent drop. The Shanghai Composite Index
slipped 0.7 percent, and South Korea’s Kospi Index (KOSPI) decreased 0.5
percent. Markets in India, Turkey, Malaysia and the Philippines
were closed for a holiday.
To contact the reporters on this story:
Stephen Kirkland in London at
skirkland@bloomberg.net;
Michael P. Regan in New York at
mregan12@bloomberg.net
To contact the editor responsible for this story:
Nick Baker at
nbaker7@bloomberg.net
