Brazil Stocks Close Higher In Late-Session Rally

SAO PAULO (Dow Jones)--Brazil stocks closed higher Thursday in a late-session rally, helped along by solid earnings locally and improving U.S. data.

The Ibovespa stock index on the Bovespa stock exchange settled the day 1.4% higher to 64,809 points. Volume was a lower 5.4 billion Brazilian reals ($3.13 billion).

"Today's data in the U.S. motivated investors because at long last we saw production increases coupled with lower jobless claims. Before we were seeing production increases and unemployment claim increases, which didn't bode well for the future," said Sergio Machado, portfolio manager at boutique investment firm Vetorial Asset Management in Sao Paulo.

U.S. third quarter productivity rose to its highest level in six years and jobless claims fell by 20,000, slightly more than the market had expected. That news gave investors a reason to buy equities and other foreign assets, pushing the Brazil stocks higher right along with Wall Street, which cracked 10,000 points on the Dow Jones Industrials for the first time all week.

Brazil's economy continues recovering and third quarter earnings are showcasing that. Steelmaker Gerdau SA (GGB, GGBR4.BR) said Thursday it was increasing its investment plan for next year after reporting third quarter profits of BRL655 million compared to a BRL329 million loss last year.

Gerdau shares closed 2.04% higher at BRL28.05, the best performing metals company on the index Thursday.

Companhia Siderurgica Nacional (SID, CSNA3.BR), better known as CSN, settled 0.63% higher to BRL60.78.

Telecommunications giant Vivo (VIV) also reported better than expected third quarter results, with net profits rising to BRL340 million compared with BRL133.9 million in the third quarter of 2008. Vivo shares settled 5.19% higher to BRL48.60.

There remains some talk that the government is considering taking other measures to avoid further currency appreciation and the possibility of a stock market bubble, but aside from last month's 2% tax on foreign capital buying fixed income and equity investments, no new measures have been announced.

Investors are still cautious about further intervention, however. The Ibovespa index was holding steady at 0.5% and only made a greater move once the Dow headed closer to 10,000 points.

Meanwhile, Brazil's other major stocks all closed higher. Vale (VALE, VALE5.BR) settled 0.7% higher to BRL41.90 and Petrobras (PBR, PETR4.BR) closed up 1.96% to BRL36.40.

-By Kenneth Rapoza, Dow Jones Newswires; (5511) 8812-5961, kenneth.rapoza@dowjones.com

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(END) Dow Jones Newswires

November 05, 2009 15:29 ET (20:29 GMT)


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