Brazilian Stocks Advance as Commodities Rise, U.S. Growth Tops Forecasts

Brazil’s Bovespa stock index rose the most in three months, paring a weekly drop, as an increase in commodity prices buoyed producers, and the U.S. economy expanded faster than analysts estimated.

Vale SA, the world’s biggest iron ore producer, rose 3.1 percent as metals gained. Lupatech SA, Brazil’s biggest provider of oil equipment and services, rebounded from the lowest price since December 2008 after a contract with Petroleo Brasileiro SA boosted its earnings outlook. Petrobras, as the state-controlled oil company is known, gained on speculation it is close to an agreement with the government on its share sale and oil reserve swap.

“We’d been falling for several sessions, and after the GDP number came in a little better than people feared, it helped us,” said Guilherme Sand, who helps oversee 1 billion reais ($571.3 million) at Solidus Brokerage in Porto Alegre, Brazil.

The Bovespa stock-index rose 2.7 percent to 65,585.14, the biggest gain since May 27. The gauge declined 1.6 percent this week. The BM&FBovespa Small Cap index rose 1.4 percent to 1,274.47. The real strengthened for a third day, gaining 0.6 percent to 1.7510 per dollar.

The U.S. economy grew in the second quarter at a 1.6 percent annual rate, surpassing the median forecast of economists surveyed by Bloomberg. The Bovespa followed the U.S. market lower this week after lower-than-forecast U.S. durable- goods orders and home sales cast further doubt on the strength of the world’s largest economy.

Economic Recovery

Federal Reserve Chairman Ben S. Bernanke said today the U.S. central bank “will do all that it can” to ensure a continuation of the economic recovery, and outlined steps it might take if growth slows. Commodity prices tracked by the Reuters Jefferies Commodities Index climbed 1.2 percent.

Vale SA advanced to 41.95 reais. The Brazilian mining company’s fertilizer unit will invest $12 billion by 2014 to become the world’s second-largest phosphate and potash producer, Brasil Economico newspaper reported, citing Mario Barbosa, the head of the business.

Lupatech gained 5 percent to 20.31 reais. The company signed a renewable three-year pact with Petrobras, Brazil’s state oil company, for cable anchorage services worth 68.8 million reais ($39.3 million), according to a regulatory filing. The contract with its biggest buyer adds to a 2.5 billion-real backlog, Bank of America Corp. analysts Frank McGann and Conrado Vegner wrote in a note to clients dated yesterday.