Euro, S&P 500 Rise on Optimism on Europe Banks, Manufacturing - By Michael P. Regan and Rita Nazareth

The euro rallied and the Standard & Poor’s 500 Index rebounded from an eight-month low on signs that funding pressure for European lenders is easing and American manufacturing is withstanding turmoil in financial markets.

The shared European currency jumped 0.9 percent to $1.2291 at 11:59 a.m. in New York and rebounded 0.7 percent from an eight-year low against the yen. The S&P 500, which plunged 3.1 percent yesterday, rose 0.6 percent to 1,046.92 to trim its quarterly decline to 10.5 percent. Treasury 2-year yields increased four basis points from a record low and 10-year yields rose three basis point to 2.98.

Banks advanced after the European Central Bank said it will lend 131.9 billion euros ($161.5 billion) for three months, less than economists forecast and easing concern the region’s lenders will struggle for funding after a 12-month ECB lending program expires. Industrial shares led the gain the S&P 500 as the Institute for Supply Management-Chicago Inc. said its gauge of U.S. business activity expanded for a ninth month.

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