Stocks gain with euro on earnings as S&P 500 futures pare drop

Battery Park

Treasury futures erased an advance, leaving the 10-year contract expiring in December at 132 25/32, after it earlier rose to 133 2/32, the highest level since Oct. 16.

Hurricane Sandy, spanning 900 miles, slammed into southern New Jersey at 8 p.m. local time and brought a record storm surge into Manhattan’s Battery Park. U.S. airlines have grounded about 12,500 flights.

“It was a case of pricing in the worst and we don’t seem to have seen the extremes of what could have occurred in the last 24 hours, so markets have just taken a little bit of that negativity off the table,” Jeremy Stretch, head of foreign- exchange strategy at Canadian Imperial Bank of Commerce in London, said in an interview.

Italy’s 10-year bond yield fell four basis points to 4.97 percent after rising 17 basis points in the past three days. The rate on similar-maturity Spanish securities dropped two basis points to 5.64 percent.

Italy sold 4 billion euros ($5.2 billion) of new 3.5 percent five-year notes and as 3 billion euros of 10-year bonds at an auction today, meeting its maximum target. A report today showed German unemployment climbed twice as much as economists forecast in October.

The yen strengthened 0.5 percent to 79.38 per dollar and gained 0.3 percent to 102.65 per euro. The Bank of Japan raised its asset-purchase fund, its main policy tool, by 11 trillion yen ($138 billion) to 66 trillion yen.

Gasoline fell for the first time in four days. Natural gas advanced 0.2 percent. Copper gained 0.5 percent to $7,738.75 a metric ton after China, the world’s largest buyer of industrial metals, pumped a record 395 billion yuan ($63 billion) into the financial system by offering reverse repurchase agreements, according to a trader who participates in the auctions.

Emerging Markets

The MSCI Emerging Markets Index gained 0.2 percent. Russia’s Micex Index gained 0.4 percent and the Shanghai Composite Index added 0.2 percent. South Korea’s Kospi index advanced 0.4 percent as the country’s current-account surplus widened to the second biggest on record in September. Taiwan’s Taiex Index jumped 1.3 percent, snapping a seven-day slide, its longest slump since May 2010. India’s Sensex index lost 1 percent as the central bank kept interest rates unchanged.

Bloomberg News

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