Stocks rise on Spain bailout optimism, earnings while euro gains

Spanish Bonds

Spain’s 10-year bonds rose, pushing the yield one basis points lower to 5.81 percent after driving it down nine points earlier. The nation sold 4.86 billion euros ($6.3 billion) of debt, exceeding its 4.5 billion-euro target. The Treasury auctioned 12-month bills at an average yield of 2.823 percent, compared with 2.835 percent at the previous auction on Sept. 18, and sold 18-month securities at 3.022 percent, compared with 3.072 percent last month.

Demand for the 12-month notes was 2.71 times the amount sold, up from 2.03 last month and the bid-to-cover for the longer-dated bills was 3.04 compared with 3.56 in September.

Spain is prepared to seek financial aid from the euro area and is waiting for a decision on how the request would affect Italy, the Financial Times reported, citing a senior official in Spain’s economy ministry it didn’t name.

‘Possible Move’

For Spain, where Prime Minister Mariano Rajoy’s government has said it won’t request aid until the terms are clearer, a precautionary credit line “would be a possible move,” Barthle, the budget spokesman for Merkel’s party, said today in a text message. The 500 billion-euro ($650 billion) permanent rescue fund, the European Stability Mechanism, which came into force on Oct. 8, “envisages help for sectors in the economy with limited conditionality.”

German bunds fell, pushing the yield seven basis points higher to 1.54 percent.

The MSCI Emerging Markets Index rose 0.9 percent, jumping the most this month. South Korea’s Kospi advanced 0.8 percent and Taiwan stocks added 0.7 percent. Equity gauges in Turkey, Russia, South Africa, Hungary and the Czech Republic also gained.

Bloomberg News

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