U.S. stocks rise as European shares tumble with Italian bonds

Consumer Confidence

The Conference Board’s consumer confidence index climbed to 69.6, exceeding all forecasts in a Bloomberg survey of economists, from a revised 58.4 in January. It was the first improvement in four months and the biggest since November 2011.

President Barack Obama’s administration released a report yesterday on how $85 billion in automatic spending cuts scheduled to begin next month will degrade programs from defense to education to public health. Even so, there isn’t a measure of money in the U.S. that is forecasting worse times ahead as lawmakers voice alarm that the cuts may damage the economy.

In European bond markets, the additional yield investors demand to hold 10-year Italian bonds instead of benchmark German bunds, a measure of perceived risk, increased 51 basis points to 344 basis points. Italy sold 8.75 billion euros ($11.5 billion) of six-month bills today at 1.237%, the highest since Oct. 29 and up from 0.731% at an auction of similar maturity debt Jan. 29.

Italian Bonds

Credit-default swaps insuring Italian bonds rose 41 basis points to 291, the highest level of the year. The Markit iTraxx Financial index of swaps linked to 25 banks and insurers climbed 17 basis points to 168, also the highest level of the year. Spain’s 10-year yield jumped 20 basis points to 5.37% and Portugal’s climbed 39 basis points to 6.56%.

The Stoxx 600 erased its monthly advance as more than seven shares fell for each one that advanced. Italian banks UniCredit SpA, Intesa Sanpaolo SpA and Banco Popolare SC sank more than 8%.

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