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Sept. 29 (Bloomberg) -- Commodities advanced, paring the biggest quarterly drop since 2008, as German lawmakers approved an expansion of the European bailout fund, easing concern that the debt crisis will escalate.
The Standard & Poor’s GSCI index of 24 raw materials climbed 0.5 percent to settle at 606.79 at 3:47 p.m. New York time, led by an agriculture rally. Sugar and hogs posted the biggest gains since July, and crude oil closed above $82 a barrel. The dollar dropped against the euro.
The lower house of Germany’s parliament granted the bailout fund powers to buy bonds in secondary markets, enable bank recapitalizations and offer precautionary credit lines. The GSCI has slumped 9.3 percent since the end of June, the most since the fourth quarter of 2008, on speculation that a European default would lead to recession, curbing commodity demand.
“What you have in place today is a little bit more optimism surrounding Germany’s vote to rescue Greece and their debt problem,” Luis Rangel, a vice president of commodity derivatives at ICAP Futures LLC in Jersey City, New Jersey, said in a telephone interview. “That has brought the dollar down, and it’s encouraging a little bit of risk to come back into some of these markets.”
The Standard & Poor’s 500 Index climbed as much as 2.2 percent after government reports showed that the U.S. economy in the second quarter grew faster than estimated and jobless claims last week fell more than forecast.
“The better jobless numbers did work to help push the equity markets higher,” Sterling Smith, a senior market analyst at Country Hedging Inc. in St. Paul, Minnesota, said in a telephone interview. “That applied some pressure to the dollar. That in turn did let some support move into the commodity space.”
--Editors: Patrick McKiernan, Millie Munshi
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