Brazil-JBS-Swift shares bounce back.

BRAZIL-JBS-SA SHARES BOUNCE BACK.

Brazilian stocks gained as commodity prices advanced and investors speculated that easing inflation may allow policy makers to make larger cuts in interest rates later today to boost consumer spending.

Cia. Vale do Rio Doce and Petroleo Brasileiro SA, the two biggest stocks in the Bovespa index, gained more than 1 percent as metal and oil prices jumped. Retailers and homebuilders led gains as Banco Santander SA said Brazil ’s central bank may cut its benchmark lending rate 150 basis points today, more than the 1 percentage-point cut expected by most economists surveyed.

The Bovespa index added 1.1 percent to 46,343.90 at 9:11 a.m. New York time. Most Brazilian stocks gained yesterday after analysts recommended that investors buy defensive stocks including utilities because of the swine flu.

Vale advanced 1.1 percent to 29.83 reais. The Bloomberg Base Metals 3-Month Price Commodity Index rose 2.9 percent to 130.74.

Base metals, oil and soybeans gained as the dollar fell against the euro, increasing the appeal of commodities as an investment to hedge against inflation. Brazil ’s biggest exports are iron ore products, oil, soybeans, and beef and poultry, according to the trade ministry’s Web site.

Petrobras gained 30 centavos to 29.13 reais. A discovery was made at well 4BRSA727ES in the ES-T-372 block, the National Petroleum Agency said on its Web site. The Corrego Cedro Norte field in this block was declared a commercial find in a filing dated Oct. 21, according to the agency’s Web site.

Rate Outlook

Policy makers, led by President Henrique Meirelles, will lower the so-called Selic rate to 10.25 percent from 11.25 percent, according to 40 of 56 economists surveyed by Bloomberg. Santander predicts the central bank will cut its benchmark lending rate 150 basis points to 9.75 percent. Policy makers will announce the decision after 5 p.m. New York time.

Brazilian prices as measured by the IGP-M price index of consumer, construction and wholesale prices fell 0.15 percent in April, the Rio de Janeiro-based Getulio Vargas Foundation said today.

Cyrela Brazil Realty SA Empreendimentos & Participacoes, the country’s biggest estate developer, surged 2.6 percent to 13.29 reais. Lojas Americanas SA, Brazil ’s largest discount retailer, climbed 1.5 percent to 8.77 reais.

The Bovespa has climbed 23 percent this year on speculation government measures, falling interest rates and a recovery in commodity prices will boost growth. The gauge is up 56 percent from its Oct. 27 low.

Stocks in Asia and Europe rose today while equity futures climbed in the U.S. on improving earnings prospects, overshadowing the spreading swine flu and reports showing that the U.S. economy plunged again in the first quarter, capping its worst performance in five decades.