American companies poised to boost capital spending

Shares Climb

Stocks rose amid speculation the Federal Reserve will expand policy measures and as lawmakers continued talks on the budget. The Standard & Poor’s 500 Index climbed 0.3 percent to 1,431.77 at 9:37 a.m. in New York.

Elsewhere today, U.K. jobless claims unexpectedly fell in November and a wider measure of unemployment dropped the most in 11 years, underlining the resilience of the labor market in the face of a weak recovery.

A pickup in U.S. capital spending will benefit companies including Caterpillar Inc., the world’s largest maker of construction and mining equipment, and Deere & Co., the biggest global agricultural equipment maker, said James Paulsen, chief investment strategist in Minneapolis for Wells Capital Management, which oversees about $325 billion.

Growth “is again reaccelerating,” Paulsen said. That “should do wonders in accentuating animal spirits and boosting capital spending.”

Global Growth

The world economy will expand 3.6 percent next year, compared to 3.3 percent this year, the least since the 2009 recession, the International Monetary Fund projected in October.

Citigroup Inc.’s economic surprise index for China, a measure of how data are beating or trailing median forecasts, rose on Nov. 29 to 30.80, the highest level since March 8. German investor confidence jumped more than economists forecast in December, reaching a seven-month high, on speculation Europe’s largest economy will gather momentum, according to a report yesterday.

For now, business confidence in the U.S. is shaky because of concern lawmakers will fail to reach a budget deal to avert more than $600 billion in spending cuts and tax increases slated to take effect next year, which the Congressional Budget Office projects would tilt the economy into a recession.

Business Roundtable, an association of chief executive officers of U.S. companies with more than $7.3 trillion in annual revenue, warned last month that fiscal inaction “is stifling business investment and hiring.” Small business optimism fell in November to the lowest level since March 2010, according to the National Federation of Independent Business’s optimism index released yesterday.

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