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Equities poised to snap losing streak as U.S. data brightens
By Carla Mozee, MarketWatch
Last Update: 2:46 PM ET Jun 18, 2009
LOS ANGELES (MarketWatch) -- Latin American equity markets rose Thursday, aided by gains on Wall Street on data that highlighted an improving U.S economic picture.
Brazil's Bovespa rose 0.3% to 51,184. Gains among home builders, retailers, and finance stocks offset declines in the agricultural and steel groups. Home builder Gafisa GFA rose 2.6% and department stores operator Lojas Renner climbed 3.5%.
But shares of miner Vale VALE and CSN SID were modestly lower and state-run oil giant Petrobras PBR slipped 0.2%.
Mexico's IPC rose 1.1% to 24,404. A 2.3% climb in shares of Cemex CX helped pull the benchmark higher.
Cemex stock has dropped more than 19% over the past three sessions in the wake of the company's agreement to sell its Australian operations to Holcim Ltd., a Swiss cement provider, for $1.63 billion.
Chile's IPSA rose 0.6% to 3,125, with shares of iron order and steel maker Cap higher by 4.4% and chemical producer SQM SQM up 1.5%. Argentina's Merval rose 1.1%.
Brazilian and Mexican equities have lost ground in the previous three sessions. Chile's shares have declined in the last four sessions and Argentina has pulled back in the last two days.
"The natural progression of the recovery and rally we've had in the markets is to go into a digestive phase," said Rob Lutts, chief investment officer at Cabot Money Management. "Those areas that have stretched themselves in valuations will more likely be the ones that are cashed out on," such as the energy and financial groups, he said.
The Bovespa and the IPSA are each up more than 30% so far this year. The Merval has risen 44% and the IPC has gained 9%.
"Emerging markets have strong year-to-date numbers, particularly when you contrast them with developed markets," such as a nearly 2% gain in the S&P 500 Index, Lutts said.
Regional equities and stocks on Wall Street found support from a U.S. government report that continuing jobless claims in the U.S. fell by 148,000 to 6.68 million during the week ending June 6. It was the lowest level since May 9.
Manufacturing firms in the Philadelphia region reported the best business conditions since September, according to figures Thursday from the Federal Reserve Bank of Philadelphia.
Also, the Conference Board's index of leading economic indicators rose 1.2% in May, the second straight increase. The private research organization said the recession is "losing steam" and a slow U.S. recovery should begin by the end of the year. See full story.
The S&P 500 Index $SPX climbed 1.2% and the Dow Jones Industrial Average $INDU rose 1.1%, with each of the benchmarks on track to break a three session losing streak.
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