Feb. 21 (Bloomberg) -- Commodities jumped to a six-month high as euro-area finance ministers reached agreement on a second debt bailout for Greece and U.S. equities rallied, boosting prospects for raw-material demand.
The Standard & Poor’s GSCI Spot Index of 24 commodities rose 1.7 percent to close at 699.92 at 3:46 p.m. in New York, after reaching 700.79, the highest since July 27. Metals led the gains with silver up 3.7 percent and aluminum gaining 3.5 percent. The Dow Jones Industrial Average climbed above 13,000 for the first time since 2008.
Greece won a rescue after governments in Europe wrung concessions from private investors and tapped the European Central Bank to shield the region from a default. Finance ministers awarded 130 billion euros ($173 billion) in aid. Investors who were waiting for a Greece resolution are “planting themselves long commodities,” said James Cordier of OptionSellers.com.
“In the U.S., we have the Dow touching 13,000, and that is opening a whole lot of eyes to the fact that the U.S. economy is getting possibly much better,” Cordier, a portfolio manager, said in a telephone interview from Tampa, Florida. “You have investors really pouring money into the riskier assets and, of course, commodities get to be the big winner.”
The S&P GSCI has advanced 8.5 percent this year, helped by higher U.S. factory output and a jobless rate in January that was the lowest in three years. The central bank of China, the largest metals and energy consumer, has also cut reserve requirements for banks. Chinese Vice President Xi Jinping says that the global economy faces an “uphill struggle” as it seeks to recover from a financial crisis.
Copper futures for May delivery climbed 3.5 percent to settle at $3.8445 a pound on the Comex in New York, the biggest gain for a most-active contract since Nov. 30.
Spot gold rose 1.4 percent to $1,759.27 an ounce. Zinc rose 2.3 percent to $2,028 a ton on the London Metal Exchange. The biggest increase since Feb. 3.
Crude-oil futures for March delivery rose 2.5 percent to settle at $105.84 a barrel, after reaching $106.07, the highest price since May 5. There was no floor trading in the U.S. yesterday because of a holiday.
--Editors: Steve Stroth, Patrick McKiernan
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