11 May 2009
May 8 (Bloomberg) -- Stocks gained around the world as Federal Reserve Chairman Ben S. Bernanke said a review of banks' health "should provide considerable comfort" and a report showing fewer job losses than forecast signaled the worst of the recession is over. Treasuries and oil gained. The dollar fell.Citigroup Inc., Deutsche Bank AG and Mitsubishi UFJ Financial Group Inc. jumped at least 4.6 percent and Fifth Third Bancorp rallied 59 percent. The government said U.S. banks need to raise only $74.6 billion, which Bernanke said should reassure investors about the soundness of the financial system. Exxon Mobil Corp. and BP Plc led an advance in energy companies as the jobs report boosted expectations fuel demand will increase.
"Investors' confidence seems to have returned," said David Goerz, who oversees $17 billion as chief investment officer at Highmark Capital Management in San Francisco. "There's relief from the results of the stress tests and interesting finds from the unemployment report."
The Standard & Poor's 500 Index climbed 2.4 percent to a four-month high of 929.23 at 4:06 p.m. in New York, capping its eighth weekly advance out of the past nine. The Dow Jones Industrial Average added 164.8 points, or 2 percent, to 8,574.65. Almost seven stocks gained for each that fell on the New York Stock Exchange.
The S&P 500, the benchmark index for U.S. shares, has rallied 33 percent since President Barack Obama said on March 3 that the market was a bargain for investors with a long-term perspective. The gauge added 5.9 percent this week, its best rally since the end of March, and extended its 2009 advance to 2.9 percent.
Earnings Beat Estimates
The MSCI World Index added 2.1 percent, extending its weekly gain to 6.4 percent. The gauge of 23 developed countries has surged 38 percent since March 9 as earnings at companies from Credit Suisse Group AG to Ford Motor Co. beat estimates and optimism grew that the worst of the credit crisis has passed.
The S&P 500, which has risen 37 percent from a 12-year low in March, this week erased its loss for 2009.
Treasuries gained for the first time in four days. The benchmark 10-year note's yield fell six basis points, or 0.06 percentage point, to 3.29 percent at 4:20 p.m. in New York, according to BGCantor Market data. It earlier touched 3.38 percent, the highest since November. The yield increased 13 basis points as the note fell for a seventh week, the longest such run since 2004.
Oil Advances
Crude oil rose to the highest level since November and gained 10 percent this week as reports on U.S. home sales and manufacturing in China boosted optimism about the economy and after U.S. crude-oil supplies climbed less than forecast. Payrolls fell by 539,000, after a 699,000 loss in March, the Labor Department said today in Washington. A loss of 600,000 jobs was forecast in a Bloomberg News survey.
"Clearly, the better-than-expected jobs number supports the recent rally that's been based on early signs of an economic recovery," said John Kilduff, senior vice president of energy at MF Global Inc. in New York. "There is a natural skepticism that comes with this rally because the fundamentals of the oil market are so poor."
Crude oil for June delivery rose $1.92, or 3.4 percent, to $58.63 a barrel at 2:59 p.m. on the New York Mercantile Exchange, the highest settlement since Nov. 11. Futures had the largest weekly gain since the week ended March 20.
The dollar declined to a six-week low against the euro as the jobs report reduced demand for relative safety.
Canadian Dollar Rises
Canada's currency advanced to the highest level versus the greenback since November on the nation's unexpected addition of jobs in April. The yen slid versus all but two of the 16 most actively traded currencies tracked by Bloomberg and touched a seven-month low against Australia's dollar this week as evidence the recession is easing spurred demand for higher yields.
"The prevailing flow now is negative for the dollar, negative for the yen, positive for the commodity-linked currencies and higher yielders," said Michael Woolfolk, senior currency strategist at Bank of New York Mellon in New York. "Right now, the report is given a positive spin by the market. The market is grabbing on the green-shoot rally."
The dollar lost as much as 1.8 percent to $1.3633 versus the euro, the weakest level since March 26, before trading at $1.3633 at 4:20 p.m. in New York. It was the biggest intraday decrease since April 2. The U.S. currency dropped 0.7 percent to 98.44 yen, from 99.12. The euro increased 1.1 percent to 134.20 yen, from 132.71.
