By Guillermo Parra-Bernal
SAO PAULO, March 1 (Reuters) - Brazilian stocks gained fora third day on Monday, led by commodity exporters and as datashowing rising consumption data in the United States suggesteda firming economic recovery in the world"s largest economy.
A strong fourth-quarter earnings season also spurredincreases in shares of mining companies, steelmakers, commodityproducers and financial companies in Brazil. The country"seconomy is expected to grow 5.8 percent this year, according tothe central bank"s estimates.
"The good mood returned after a recent wave of pricecorrections, but markets will stay data-dependent until clearersigns of the global recovery arise," said Kelly Trentin, chiefof equity research at Sao Paulo-based Spinelli Corretora.
The benchmark Bovespa stock index .BVSP rose 0.5 percentto 66,874.43, the highest since Feb. 22. Forty-seven stocksrose, led by steelmaker Gerdau (GGBR4.SA) and paper and pulpconglomerate Fibria (FIBR3.SA), while 16 fell.
In a note distributed on Monday to clients, Credit Suissestrategists led by Sao Paulo-based analyst Emerson Leite, saidBrazilian stocks remain attractive after companies postedfourth-quarter earnings an average 2 percent above the bank"spredictions.
"These recurring earnings surprises could result in upwardrevisions in earnings, which should contribute to marketappreciation," the note said.
Trentin, who said the better results have been reported bysteelmakers, retailers and consumer goods companies, said thetrend could gain traction if further signs of a recovery in theU.S. economy appear.
The U.S. Commerce Department said earlier that consumers"spending increased in January for a fourth straight month. Yet,job losses and high debt limited a rise in incomes, which roselittle above zero.
Investors in Brazil have become more U.S. data-dependent,as developments in equity markets there are seen as a gauge ofrisk-taking and global confidence.
REAL UP
Gerdau rose for a third day, adding 1.7 percent to 26.89reais. The company shut down its mills in Chile after anearthquake hit the nation over the weekend, but fell short ofreporting serious damages to facilities.
Fibria, the byproduct of a government sponsored merger lastyear between pulp producers VCP and Aracruz, added 1.4 percentto 33.41 reais.
The company reported a narrower loss than expected onFriday and management said recent moves to slash financialcosts helped virtually eliminate the company"s exposure totoxic derivatives.
Limiting the gains in the Bovespa, Brasil Foods (BRFS3.SA)fell 1.3 percent to 43.51 reais. The company, Brazil"s largestpoultry producer, said on Friday gross revenues tumbled 14percent last year as export volumes plummeted.
The real (BRBY), Brazil"s currency, rose for a second dayagainst the dollar and added 0.3 percent to 1.802 reais.Earlier in the morning it rose beyond the 1.80-reais-per-dollarmark for the first time in a week.
Yields on Brazilian interest rate future contracts <0#DIJ:>rose on Monday after investors stepped up bets that the centralbank might anticipate an expected increase in borrowing coststo this month, instead of April.
Brokerages are now estimating a probability of about 60percent that the central bank might front-load the monetarytightening cycle and boost the benchmark overnight Selic rateby half a percentage point. Last week, they gauged a 100percent probability of a 0.25 percentage point hike in theSelic.
The yield on the Jan. 2011 contract DIJF1 rose 2 basispoints to 10.50 percent in midday trading. (Additional reporting by Paula Laier and Silvio Cascione inSao Paulo, Editing by Chizu Nomiyama)
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