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Stocks Rise on Economic Outlook as Greece Concern Hurts Euro

Feb. 15 (Bloomberg) — Stocks in Europe rose on the outlook for economic growth and earnings, while the euro weakened on concern European officials meeting today won’t spell out how they plan to help Greece tackle the region’s largest deficit.

The Dow Jones Stoxx 600 Index increased 0.7 percent at 10:08 a.m. in London. The euro declined against 10 of its 16 most-traded peers. U.S. markets are closed today for Presidents’ Day, while China, Taiwan, Hong Kong, Singapore and Malaysia were shut for the Lunar New Year holiday.

Mining companies rallied as Goldman Sachs Group Inc. Chief Economist Jim O’Neill said China’s growth is fast enough that the government may let the yuan strengthen as much as 5 percent to curb inflation. About 72 percent of companies in the Standard & Poor’s 500 Index that have reported quarterly earnings since Jan. 11 have beaten analysts’ forecasts, according to Bloomberg data. Finance ministers of the 16 euro nations face investor pressure to explain measures agreed on last week to aid Greece.

“Concerns over sovereign solvency are unlikely to have gone away for good, but there may be some calming of fears in the near term,” David Shairp, the global strategist at JPMorgan Asset Management in London, wrote in a note to clients today. “We anticipate episodic bouts of investor anxiety, as sentiment remains fragile. But for the time being, we stick with our strategy of overweight equities.”

Asia Declines

The MSCI World Index of 23 developed nations’ stocks rose 0.2 percent. The MSCI Asia Pacific Index fell for the first time in a week on concern Japan’s deflation will persist even after the economy expanded more than forecast in the fourth quarter.

In Europe, all 19 industry groups on the Stoxx 600 advanced, extending the benchmark gauge’s first weekly gain in a month. Renault SA rose 3 percent in Paris after Morgan Stanley advised buying the shares. Air Liquide SA, the world’s biggest producer of industrial gases, climbed 2.8 percent after reporting earnings that beat analysts’ estimates. British Airways Plc and Iberia Lineas Aereas de Espana SA rose more than 4 percent after winning U.S. approval for an expanded alliance with AMR Corp.’s American Airlines.

Fifty-six percent of companies in the Stoxx 600 that have reported earnings since Jan. 11 have beaten analysts’ estimates for net income, according to Bloomberg data. More than 350 companies in the S&P 500 have posted quarterly earnings in the same period, with companies beating estimates by an average of 12 percent, the data show.

Emerging Markets

Commodity producers led advances in developing-nation stocks, led by a 1.4 percent jump for Kazakhstan’s KASE Index and 1 percent increase in South Africa’s JSE All Shares Index. The MSCI Emerging Markets Index was 0.1 percent higher.

The euro dropped as much as 0.4 percent against the dollar and 0.2 percent compared with the yen as European finance ministers prepared to meet in Brussels. Investors want details of a planned Greek bailout after European leaders pledged to support the nation, stopping short of committing public funds.

“We do not expect a clarification of how Greece is going to be rescued in an emergency,” Ulrich Leuchtmann, the head of currency strategy at Commerzbank AG in Frankfurt, wrote in an e- mailed note today. “Uncertainty about this issue is therefore likely to continue putting pressure on the euro this week.”

Greek bonds were little changed, with the yield on the two- year note falling 4 basis points to 5.08 percent. The 10-year yield held at 6.15 percent.

Dubai Swaps

The cost to protect against a default by Dubai rose to the highest level since March as credit-default swaps rose 22.5 basis points to 650 basis points, according to CMA Datavision. Dubai World, the state-owned holding company seeking to restructure $22 billion of debt, may offer creditors 60 cents on the dollar after seven years, Zawya Dow Jones reported Feb. 14, citing unidentified people familiar with the plans. Dubai and Dubai World have not yet made an offer to creditors, a Department of Finance spokeswoman said.

Copper for delivery in three months climbed $34, or 0.5 percent, to $6,844 a metric ton on the London Metal Exchange, extending last week’s 8.4 percent jump, the most since July. China is the biggest user of copper and Japan is the fourth- largest, according to estimates by the International Copper Study Group in Lisbon.

Cocoa for March delivery climbed 13 pounds, or 0.6 percent, to 2,299 pounds ($3,603) a ton on Liffe in London on speculation exports from Ivory Coast, the world’s biggest grower, may be disrupted after President Laurent Gbagbo dissolved the government.

Crude oil for March delivery fell 9 cents, or 0.1 percent, to $74.04 a barrel on the New York Mercantile Exchange.