Markets recover

After sliding for most of the week, markets reversed direction on Friday. Bloomberg reports:

U.S. stocks jumped, halting a weeklong global slide, while the euro rose for a third day and Treasuries erased an early gain on speculation the rout in risky assets overshot the potential damage from Europe’s debt crisis.

The Standard & Poor’s 500 Index climbed 1.5 percent to 1,087.69 at 4 p.m. in New York, erasing a morning drop of 1.5 percent that dragged the gauge below its weakest level during the May 6 crash. Brazil’s Bovespa index surged 3.6 percent, while copper jumped the most since February on signs of stronger demand in China. Currencies of commodity producing nations rallied versus the dollar. The 30-year Treasury yield rose one basis point to 4.1 percent after earlier dropping to 3.98 percent, its lowest level of the year.

Economic reports on Friday were mixed.

Reuters reports that the BoJ has raised its outlook for the Japanese economy.

The Bank of Japan raised its outlook for the economy by a notch on Friday and announced a loan scheme targeting growth industries, but also warned that Europe's debt debacle posed a risk to the global economy.

The central bank said the world's second-largest economy was "starting to recover moderately" -- striking a slightly more optimistic tone than in previous statements...

As widely expected, the central bank kept the benchmark rate on hold at 0.1 percent and outlined its plan to offer loans at that rate to banks that will fund projects in sectors with growth potential.

However, eurozone growth may be slowing. From Bloomberg:

Growth in Europe’s services and manufacturingindustries slowed more than economists forecast in May, suggesting the euro-region economy may struggle to gather strength as a fiscal crisis hurts confidence.

A composite index based on a survey of euro-area purchasing managers in both industries fell to 56.2 from 57.3 in April, London-based Markit Economics said in an initial estimate today. Economists forecast a drop to 57.2, the median of 15 estimates in a Bloomberg survey showed. A reading above 50 indicates expansion...

A gauge of euro-area manufacturing declined to 55.9 from 57.6 in the previous month, Markit said in today’s report. That’s the first decline since February 2009. An index of services, which account for about 60 percent of the region’s gross domestic product, rose to 56 in May from 55.6...

In Germany, Europe’s largest economy, the Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, fell to 101.5 this month from 101.6 in April. Economists had forecast an increase to 101.9, the median of 37 forecasts in a Bloomberg survey showed.

A Reuters report says that economic growth is also likely to slow in the US.

A measure of future U.S. economic growth fell to a 35-week low in the latest week, indicating a slowing of the recovery, a research group said on Friday.

The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index slumped to 127.3 for the week ended May 14 from 132.0 the previous week.