Stocks Rise on Speculation U.S. Job Losses Ended; Metals Fall

By Justin Carrigan

Jan. 8 (Bloomberg) -- Stocks rose around the world, with Europe’s Dow Jones Stoxx 600 Index heading for its fourth weekly gain, on speculation the U.S. economy stopped losing jobs for the first time in almost two years. Commodities fell for a second day on concern Chinese lending curbs will sap demand.

The MSCI World Index of 23 developed nations’ stocks gained 0.2 percent at 6:35 a.m. in New York. The Stoxx 600 added 0.6 percent. Futures on the Standard & Poor’s 500 Index were little changed while the dollar traded near its highest level in more than four months against the yen before the Labor Department report. The S&P GSCI Total Return Index of commodities dropped 0.2 percent, led by zinc and lead.

U.S. payrolls probably were unchanged in December after declining every month since January 2008, according to the median of 76 economists surveyed by Bloomberg News. German exports rose more than economists forecast in November. China’s move to increase three-month bill rates may presage the nation’s first interest-rate increase in almost three years, a survey of economists showed.

“The tone of the early part of the year could be set today by the first payroll report of the new decade,” said Jim Reid, a strategist at Deutsche Bank AG in London, which is predicting a gain of 50,000 in the employment rolls. “Numbers close to this will be very welcomed for the economy and should in theory continue to help the risk appetite present in the markets.”

Banks Rally

In Europe, Barclays Plc led financial stocks higher, rising 2.2 percent in London after UBS AG upgraded Britain’s second- largest bank and lifted its recommendation on investment banks to “overweight.” Veolia Environnement SA, the world’s biggest water company, rallied 4.8 percent in Paris, the most in six months, after Goldman Sachs Group Inc. recommended the shares.

The MSCI Asia Pacific Index advanced 0.5 percent. Li & Fung Ltd., which supplies clothes to Wal-Mart Stores Inc., rose 1.8 percent in Hong Kong as U.S. retailers’ December sales beat estimates. Honda Motor Co. added 3.1 percent on speculation U.S. demand for its vehicles will increase.

U.S. futures were little changed, with the S&P 500 heading for its biggest weekly gain since November. The jobs report is scheduled for release at 8:30 a.m. in Washington. Optimism the worst of the economic turmoil is over increased in November, when the Labor Department reported 11,000 job losses, compared with a peak of 741,000 in January 2009.

Fed Pledge

The Federal Reserve has pledged to keep interest rates low as government programs attempt to stem job cuts that have driven the U.S. unemployment rate to 10 percent. Central banks around the world are beginning to withdraw stimulus measures as the global economy recovers from recession. China will lift its benchmark one-year lending rate to 5.85 percent by year-end from 5.31 percent currently, according to the median estimate of 15 economists surveyed by Bloomberg News.

The dollar rose as much as 0.4 percent to 93.77 yen, the strongest since Aug. 28, before falling back to trade 0.2 percent lower at 93.18 yen. It was unchanged compared with the euro. The pound gained against all 16 most-traded currencies, rising 0.5 percent versus the dollar, as British producer prices jumped more than forecast in December.

Poland’s WIG 20 Index advanced 0.7 percent and the zloty strengthened 0.1 percent against the euro after the government received 2.06 billion zloty ($719 million) of orders for its shares in copper producer KGHM Polska Miedz SA. Romania’s Bucharest BET Index rose 2 percent, leading the MSCI Emerging Markets Index 0.1 percent higher.

Lead retreated 2.1 percent to $2,545 a metric ton and nickel 1.7 percent to $18,150 a ton on the London Metal Exchange. The LME index of six industrial metals is heading for a second consecutive decline. Gold for immediate delivery fell 0.7 percent to $1,123.55 an ounce.

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PS.  And when those that give up looking start looking and cannot find a job....then how are the numbers skewed???