US leading index, factory output and inflation rise, India raises rates

With no significant worsening of the nuclear crisis in Japan, markets had a chance to recover on Thursday. Bloomberg reports:

Stocks rose, halting the biggest three-day drop in the Standard & Poor’s 500 Index since August, as Japan moved closer to restoring power at a nuclear plant and FedEx Corp. (FDX) forecast more profit than analysts estimated. Oil jumped as commodities rallied the most since September 2009.

The S&P 500 rose 1.3 percent to 1,273.72 at 4 p.m. in New York and the Stoxx Europe 600 Index gained 1.9 percent. Oil advanced 3.5 percent to $101.42 a barrel in New York and the S&P/GSCI Index of 24 raw materials surged 3.4 percent, the most in 17 months. The yen touched a post-World War II peak of 76.36 per U.S. dollar. Yields on 10-year Treasuries increased eight basis points to 3.25 percent, ending a three-day slide.

Positive economic data helped boost markets on Thursday. Bloomberg reports a rise in the US leading economic index in February.

The Conference Board’s gauge of the outlook for the next three to six months increased 0.8 percent after rising 0.1 percent in January, the New York-based group said today. Economists forecast a 0.9 percent gain, according to the median estimate in a Bloomberg News survey.

Other US data released on Thursday were mostly also positive. Again from Bloomberg:

Production at U.S. factories increased for a sixth month in February, indicating manufacturing will keep stoking the economy and underscoring the Federal Reserve’s view of a stronger expansion.

The 0.4 percent rise in manufacturing output, which makes up 75 percent of all industrial production, followed a 0.9 percent January gain that was three times as large as initially estimated, Fed figures showed today...

The Fed’s report showed that industrial production, which includes factories, mines and utilities, unexpectedly fell 0.1 percent in February after a 0.3 percent gain. Utility output slumped 4.5 percent during the month on milder weather...

A gauge of manufacturing in the Philadelphia area jumped to 43.4 in March, the highest since January 1984, from 35.9 in February. Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware...

Another report from the Labor Department showed first-time filings for jobless benefits dropped by 16,000 in the week ended March 12 to 385,000. The four-week average of claims dropped to the lowest level since July 2008, indicating improvement in the labor market.

But consumer sentiment has fallen while inflation is rising.

The Bloomberg Consumer Comfort Index dropped to minus 48.5 in the week ended March 13, the lowest level since August, from minus 44.5 in the prior period. Sentiment fell across most income and age groups and worsened for all education levels...

Consumer prices rose 0.5 percent in February, led by the biggest rise in food costs since 2008. Excluding food and fuel, the so-called core gauge of consumer inflation climbed 0.2 percent for a second month.

Thursday also saw more action being taken to curb inflation, this time, from India. AFP/CNA reports:

India on Thursday hiked interest rates for the eighth time in a year as concern about high domestic inflation overpowered fears that the global recovery could be increasingly fragile.

The central bank raised its repo, the rate at which it lends to commercial banks, by 25 basis points to 6.75 percent. The reverse repo, the rate it pays to banks for deposits, was also hiked by a quarter point to 5.75 percent.