“European stocks rebounded from their biggest drop in three months yesterday, while Italian two-year notes recovered after yields reached a one-month high. Oil advanced while the yen weakened.
The Stoxx Europe 600 Index (SXXP) rose 0.7 percent at 7:25 a.m. in New York. Standard & Poor’s 500 Index futures gained 0.5 percent. Italy’s two-year note yield slid 11 basis points to 1.62 percent after earlier reaching 1.77 percent, the highest since Jan. 3, while the cost of credit-default swaps insuring European investment-grade debt slid from the highest level in almost two months. The yen declined at least 0.4 percent against its major peers after Bank of Japan Governor Masaaki Shirakawa said he would step down next month. Oil climbed 0.6 percent.
Stocks are rallying after global equity markets slumped the most this year yesterday and the S&P 500 had its steepest drop since November on renewed concern Europe’s debt crisis will intensify. Companies from Munich Re to ARM Holdings Plc (ARM) posted results that beat estimates and data today showed European services output shrank less than initially estimated. U.S. service industries probably grew last month at about the same pace as in December, economists said before a report today.
“The markets seem to be rebounding from what was probably an overdone move yesterday,” Lorne Baring, managing director at B Capital SA in Geneva, which oversees almost $500 million, said in a phone interview. “Sentiment is positive at the moment and earnings have generally beat expectations. This opens the way for the U.S. market to continue its upward trend.”
