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Stocks Gain Around World on Growth Outlook as Dollar, Yen Drop

Nov. 23 (Bloomberg) — Stocks rose around the world and the dollar and the yen fell as sales of U.S. homes increased more than forecast and speculation grew that central banks will keep interest rates near record lows.

The Standard & Poor’s 500 Index rallied 1.4 percent to 1,106.24 at 4:07 p.m. in New York and the Dow Jones Industrial Average climbed to a 13-month high. Europe’s Dow Jones Stoxx 600 Index jumped 2 percent, its best gain in six weeks. Copper surged to a 14-month high and gold reached a record as the Dollar Index fell for the first time in three days.

Sales of existing U.S. homes increased 10 percent in October to the highest level since February 2007, National Association of Realtors data showed today. Economic reports this week will show rising export orders in Taiwan and South Korea, according to Bloomberg News surveys of economists’ forecasts.

“What may be perceived as strength in commodities or equity prices can just as easily be seen as weakness in the value of the dollar,” said Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., which manages about $98 billion in client assets. “What you’re seeing is an unprecedented array of government and taxpayer funded efforts to revive the economy, and they’re doing it, in the United States of course, at the expense of the dollar.”

Global stocks also advanced, and the dollar weakened, amid speculation the Federal Reserve will keep borrowing costs near record low levels. Charles Evans, president of the Fed Bank of Chicago, told the Financial Times that U.S. interest rates may stay near zero until “late 2010, perhaps later.”

‘Some Comfort’

Evans’s comment “is going to provide the market with some comfort in the near term, allow asset markets and higher-risk markets to continue to move higher,” Ian Stannard, a foreign- exchange strategist in London at BNP Paribas SA, said today in a Bloomberg Television interview. That “will keep the dollar under pressure for the time being,” he said.

All 10 industry groups in the S&P 500 advanced, led by technology, telephone and financial companies. Deere & Co. and Schlumberger Ltd. rallied 2 percent as analysts advised buying the shares. Verizon Communications Inc., AT&T Inc., General Electric Co. and Chevron Corp. climbed more than 2.5 percent to lead the Dow average up 132.79 points, or 1.3 percent, to 10,450.95.

The MSCI World Index of 23 developed nations added 1.7 percent, its biggest gain in two weeks. BHP Billiton Ltd., the world’s biggest mining company, and Rio Tinto Group rallied at least 3.5 percent in London. Renault SA, Europe’s second-biggest automaker, increased 3.8 percent in Paris after Credit Suisse Group AG advised buying the shares.