Stocks, Copper Rise; Treasuries Drop

Source: Bloomberg, Elizabeth Stanton and Kelly Bit  (9/1/10)

"Copper advanced more than 2% to pace gains in metals."


Global stocks surged the most since May, Treasuries tumbled and copper rallied as manufacturing in the U.S. and China grew faster than economists estimated. The USD, yen and Swiss franc weakened.

The MSCI World Index climbed 2.8% at 10:56 a.m. in New York—its best gain since May 27; the Standard & Poor's 500 Index jumped the same amount, and 10-year Treasury yields rose 12 basis points to 2.6%. Copper and nickel advanced more than 2% to pace gains in metals. The Australian dollar strengthened against all but one of its 16 major counterparts after the nation's economic growth topped forecasts.

Equities rebounded from the biggest August plunge in nine years as the expansion in manufacturing tempered concern that the global economy will slow as governments withdraw stimulus measures. Some Federal Reserve policymakers saw greater risks to the recovery yet the central bank signaled its hesitant to undertake another round of debt purchases to boost growth, according to minutes of an August meeting released yesterday.

"It's a combination of better industrial data out of China and the ISM data here in the United States," said Mark Bronzo, an Irvington, New York-based fund manager at Security Global Investors, which oversees $21 billion. "People have become extremely negative and, as a result, the data was better than expected and you're seeing a sharp snap back."

Indexes of industrial and energy companies rose at least 3.4% for the top gains among 10 groups in the S&P 500, all of which advanced. The benchmark for U.S. stocks slumped 4.7% in August as the economic rebound slowed.