Investing December 29, 2009, 8:55AM EST

U.S. Stock Futures Rise; Alcoa, Freeport Gain

S&P futures point further gains as commodities, steel provide boost

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By Daniela Silberstein

(Bloomberg) — U.S. stock-index futures gained, indicating the Standard & Poor's 500 Index will extend its biggest annual rally in six years, before reports that may show the decrease in home prices eased and consumer confidence rose.

Alcoa Inc (AA), the biggest U.S. aluminum maker, Freeport- McMoRan Copper & Gold Inc. (FCX), and AK Steel Holding Corp. (AKS) all advanced in Europe as metals prices climbed.

Futures on the S&P 500 expiring in March added 0.4 percent to 1,127.30 as of 12:14 p.m. in London. Dow Jones Industrial Average Index futures gained 0.3 percent to 10,518 and Nasdaq- 100 Index futures rose 0.3 percent to 1,881. Stocks in Europe and Asia also climbed.

U.S. stocks advanced yesterday, sending the S&P 500 higher for a sixth straight day, as a rally in commodity producers offset speculation that interest rates will increase. The gauge is up 25 percent this year, the largest annual gain since 2003 and trimming the decline over the past decade to 23 percent.

"If today's economic data are good the market will continue to run smoothly," said Peter Braendle, who helps oversee about $50 billion at Swisscanto Asset Management in Zurich. This year "required a lot of nerves. The beginning was very depressing and since March we've been able to breathe again and saw a decent recovery," he said.

The S&P 500 has rebounded 67 percent from a 12-year low in March after governments around the world enacted stimulus measures and the U.S. lent, spent or guaranteed more than $11 trillion to end the recession.

Economy Watch

Investors Barton Biggs and Marc Faber, who recommended buying stocks in March when investors were dumping them, say U.S. equities may keep rising together with the dollar as economies improve around the world.

The dollar today traded near a two-month high against the yen and was set for a gain versus the euro for a second day.

Property values in 20 metropolitan areas probably fell 7.2 percent in October from a year earlier, the smallest 12-month drop since 2007, according to the median forecast of 31 economists surveyed by Bloomberg News. The S&P/Case-Shiller home-price figures are due at 9 a.m. New York time.

The New York-based Conference Board's consumer confidence index, scheduled for 10 a.m., probably increased to 53 this month from 49.5 in November. The measure reached a record-low 25.3 in February and averaged 97.1 during the six-year economic expansion that ended in December 2007.

Alcoa, AK Steel

Alcoa added 0.6 percent to $16.19, while AK Steel gained 0.7 percent to $22.31. Freeport-McMoRan, the world's largest publicly traded copper producer, climbed 0.6 percent to $82.29. Copper jumped to a 15-month high on the London Metal Exchange as workers at the world's second-biggest mine voted to go on strike. Aluminum, zinc, lead, nickel and tin also advanced.

Ampal-American Israel Corp. (AMPL), the company that invests in Israel-related businesses, rallied 9.5 percent to $2.89 in Tel Aviv trading after a unit agreed to sell gas to Makhteshim-Agan Industries Ltd.

The 50 percent recovery in the S&P 500 from its bear-market bottom means gains of almost 9 percent next year, according to analysts who follow the Fibonacci system of forecasting stock prices. The benchmark index for U.S. stocks exceeded 1,120.84 on Dec. 24, recovering half its losses from the 17-month decline that ended in March.

Bill Miller has made 43 percent this year in his Legg Mason Capital Management Value Trust fund, beating 93 percent of similar funds by betting the U.S. recovery will return to its old strength.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.