Stocks: Monday’s review

Asian stocks rose, sending the MSCI Asia Pacific Index toward its biggest gain in three weeks, after Black Friday sales in the U.S. rose to a record, boosting the outlook for exporters, and as commodity prices advanced.

German Finance Minister Wolfgang Schaeuble called for fast- track treaty changes to tighten budget discipline to calm markets in an interview with ARD television in Berlin yesterday. Italian Prime Minister Mario Monti is set to propose more austerity measures this week to balance the country’s budget by 2013, the Wall Street Journal reported yesterday.

Moody’s Investors Service said the “rapid escalation” of Europe’s debt and banking crisis is threatening all of the region’s sovereign ratings. The probability of multiple defaults by euro-area countries is no longer negligible, Moody’s said in a statement today, adding that the longer the liquidity crisis continues, the more rapidly the probability of defaults will continue to rise.

In the U.S., Black Friday sales increased 6.6 percent to a record. Consumers spent $11.4 billion, ShopperTrak said in a statement on Nov. 26. Foot traffic rose 5.1 percent on Black Friday, according to the Chicago-based research firm.

Japan’s Nikkei 225 Stock Average rose 1.6 percent, while Australia’s S&P/ASX 200 gained 1.9 percent. Hong Kong’s Hang Seng Index rose 2 percent.

Li & Fung Ltd., a clothing and toy supplier that gets 65 percent of its sales in the U.S., rose 10 percent in Hong Kong.  Anta Sports Products Ltd., a Chinese sportswear maker, rose 9.5 percent to HK$7.98 in Hong Kong. LG Electronics Inc., a South Korean handset maker that gets more than 80 percent of its revenue overseas, jumped 8.6 percent. Nintendo Co., the maker of video-game machines that receives more than three-quarters of its revenue outside Japan, advanced 2.2 percent to 11,450 yen in Osaka.

Crude oil for January delivery gained 2.5 percent in New York today. Copper for three-month delivery increased 2.9 percent on the London Metal Exchange, while aluminum advanced 1.4 percent.

Alumina Ltd., which produces the material used to make aluminum, jumped 6.4 percent in Sydney, while BHP Billiton Ltd., the largest global mining company, gained 2.4 percent to A$34.85 in Sydney. Inpex Corp., Japan’s No. 1 energy explorer increased 3.8 percent to 497,500 yen in Tokyo. Cnooc Ltd, China’s biggest offshore oil producer, climbed 2.7 percent to HK$13.86, snapping a record streak of daily losses.

European stocks surged, rebounding from their biggest selloff in two months, amid speculation euro- area policy makers are intensifying their efforts to contain the sovereign-debt crisis.

Welt am Sonntag reported that the euro area’s two biggest economies plan for member states to commit to greater fiscal discipline without waiting to change European Union treaties. The newspaper did not say where it got the information.

The euro climbed as German Finance Minister Wolfgang Schaeuble urged fast-track treaty changes to tighten budget discipline and as speculation mounted that policy makers are planning to provide more aid for Italy.

Schaeuble said in an interview with ARD television in Berlin yesterday that treaty change is necessary to give veto power over member states’ budgets to the European Commission.

Separately, La Stampa reported that the International Monetary Fund is preparing a 600-billion euro ($800 billion) loan for Italy in case the sovereign-debt crisis worsens, without saying where it got the information.

An IMF official today said the Washington-based lender is not in talks with Italy about a loan program.

National benchmark indexes climbed in every western- European market except Iceland. France’s CAC 40 Index gained 5.5 percent, the U.K.’s FTSE 100 Index rose 2.9 percent and Germany’s DAX Index increased 4.6 percent.

A gauge of bank shares rallied 5.7 percent, its biggest advance in a month, as borrowing costs fell in Spain and Italy before euro-area finance ministers meet in Brussels on Nov. 29 as governments bid to regain the confidence of financial markets.

The European Financial Stability Facility may insure the bonds of debt-stricken countries with guarantees of 20 percent to 30 percent of each issue, depending on financial markets, according to EFSF guidelines that finance ministers will discuss this week.

BNP Paribas SA surged 10 percent to 28.52 euros as the Financial Times reported that France’s biggest bank (BNP) may plan to sell a portfolio of more than 50 private-equity fund interests for $700 million.

Commerzbank AG advanced 4.1 percent to 1.31 euros as Financial Times Deutschland reported that Germany’s second- largest lender is planning to repurchase so-called hybrid bonds and pay holders with new shares at it seeks ways to boost capital and reduce risk.

Dexia and KBC, Belgium’s biggest bank and insurer, soared 15 percent to 42.7 euro cents and 14 percent to 8.93 euros respectively, after Belgium sold 2 billion euros of bonds maturing between 2018 and 2041. The 10-year bond yield dropped after the auction, which followed the country’s first credit downgrade in almost 13 years.

BHP Billiton Ltd. rallied 4.4 percent to 1,836.5 pence and Total SA rose 3.7 percent to 37.01 euros, leading a rally in mining and energy companies, as copper led base metals higher in London and crude oil climbed in New York.

Rio Tinto Group also rose after the world’s second-largest mining company (RIO) said it expects to increase capital spending 17 percent next year. The company also raised its iron-ore target to meet demand from China. The shares rallied 4.4 percent to 3,164 pence.

Elsewhere, Thomas Cook Group Plc soared 21 percent to 21.73 pence after its banks agreed to provide a 200 million-pound ($311 million) loan, giving Europe’s second-largest tour operator time to reorganize its business.

Rolls-Royce Holdings Plc increased 3 percent to 698.5 pence after the company signed a contract with Deutsche Bank AG (DBK) to lower the risk on its 3 billion pounds in pension liabilities.

U.S. stocks rose, snapping a seven- day decline in the Standard & Poor’s 500 Index, after Thanksgiving retail sales climbed to a record amid speculation European leaders will boost efforts to end the debt crisis. U.S. retail sales during the Thanksgiving weekend increased 16 percent to $52.4 billion, the National Retail Federation said, citing a survey conducted by BIGresearch. The average shopper spent $398.62, up from $365.34 a year earlier. Consumer spending, which accounts for about 70 percent of the economy, grew at a 2.3 percent annual rate in the third quarter, the fastest pace in 2011, the Commerce Department said Nov. 22.

U.S. stocks maintained gains after a report showed fewer new homes were purchased in October than forecast. Sales increased 1.3 percent to a 307,000 annual pace, the Commerce Department reported today in Washington.

In Europe, German newspaper Welt am Sonntag reported German Chancellor Angela Merkel and French President Nicolas Sarkozy are discussing an agreement under which member states will commit to tighter budget discipline without waiting for treaty changes. The newspaper did not say where it got the information.

German Finance Minister Wolfgang Schaeuble called for fast- track treaty changes to tighten budget discipline among member states of the euro area. He spoke in an interview with ARD television in Berlin yesterday. The European Financial Stability Facility may insure the bonds of debt-stricken countries with guarantees of 20 percent to 30 percent of each issue, depending on market circumstances, according to EFSF guidelines that finance ministers will discuss this week. Euro-area finance ministers meet in Brussels tomorrow as governments bid to regain the confidence of financial markets.

The increased severity of the debt crisis is threatening the credit standing of the region’s countries, Moody’s Investors Service said in a report today. More than $1.2 trillion has been erased from U.S. stocks since Nov. 15 on mounting concern that the crisis will spread and American policy makers failed to reach agreement on reducing the federal budget.

After financial markets closed in New York, Fitch Ratings affirmed the U.S.’s AAA long-term foreign and local currency issuer default ratings. The outlook on the long-term rating was revised to negative from stable, with Fitch saying that a failure to reach a “credible deficit reduction plan” in 2013 and a worsening economy could lead to a downgrade.

Dow   11,523.01     +291.23       +2.59%, Nasdaq      2,527.34       +85.83 +3.52%, S&P 500   1,192.55       +33.88 +2.92%

Companies most-tied to the economy rose, sending the Morgan Stanley Cyclical Index up 3.8 percent after a 6.2 percent decline last week. Caterpillar, the world’s largest construction and mining-equipment maker, increased 5.5 percent to $91.48 for the second-biggest gain in the Dow.

Energy and raw-material producers in the S&P 500 rallied at least 3.5 percent, as crude oil rose above $100 a barrel for the first time in more than a week on signs of economic recovery in the U.S., while sanctions on Syria stoked concern Middle East crude supplies may be threatened.

Alcoa gained 5.7 percent to $9.46. The largest U.S. aluminum producer rose the most in the Dow as copper, lead, nickel and zinc advanced on the London Metal Exchange. Freeport- McMoRan Copper & Gold Inc., the world’s biggest publicly traded copper producer, surged 6.3 percent to $35.94. Molycorp Inc. climbed 14 percent to $30.65.

Suncor Energy Inc. gained 3.4 percent to $27.98. Marathon Oil Corp. increased 5.4 percent to $25.98. Halliburton Co. (HAL) advanced 3.1 percent to $32.77.

JPMorgan jumped 2.4 percent to $29.16. Goldman Sachs Group Inc. surged 2.3 percent to $90.78. A gauge of European banking shares climbed 5.7 percent, among the best performances in the benchmark Stoxx Europe 600 Index.

AT&T climbed 2 percent to $27.95. The company, which faces regulatory opposition to its acquisition of Deutsche Telekom AG’s U.S. unit, is preparing its biggest antitrust remedy proposal to salvage the deal, according to a person familiar with the plan. AT&T may offer to divest a significantly larger portion of assets than it had planned. That could be as much as 40 percent of T-Mobile USA’s assets, the person said.

Amazon.com rose 6.4 percent to $194.15. The world’s largest Internet retailer said it sold four times more Kindle products on Black Friday compared with last year.