Rising prices are "a test for the U.S.," a team led by Mansoor Mohi-uddin, the Singapore-based chief currency strategist at UBS AG, wrote in a Feb. 27 report. "Oil is moving fast up the policy-maker agenda. Event risk aside, policy makers might want to ask whether their actions are finally starting to transmit into pricing pressures for commodities."

Futures Bets

Soybeans jumped 10 percent to a five-month high on the Chicago Board of Trade in February, the most since 2010, as U.S. export sales rose and the government forecast that inventories will slump 25 percent before the 2013 harvest. Sugar advanced 5.8 percent on ICE Futures U.S., the most since July, after drought cut supplies from Mexico. Lumber traded in Chicago advanced 11 percent on improved demand from China.

Nickel, coffee and cotton were the biggest losers on the GSCI, declining 7.7 percent, 5.5 percent and 3 percent, respectively. Gold dropped 2.5 percent.

Commodity investments may increase by as much as $40 billion, or 10 percent, in 2012 after the weakest inflows since 2002 last year as investors favor oil, gold and copper, Kevin Norrish, an analyst at Barclays Capital in London, said Feb. 23. Commodity assets under management were $399 billion at the end of 2011, the bank said in a Jan. 26 report.

Open interest, the number of futures contracts that haven't been closed or delivered, for 24 commodities from oil to copper rose 3.3 percent through Feb. 27 to the highest level since April, data compiled by Bloomberg show. Speculators are the most bullish since September, Commodity Futures Trading Commission data showed, with wagers on gains in gold climbing to a five- month high and bets on crude oil rising to the most since May. Improved Earnings

Improved Earnings

The MSCI All-Country World Index advanced for a second month, returning 5.1 percent in February after 5.8 percent in January. The measure, which includes both developed and emerging market stocks from 45 countries, climbed to 332.44 on Feb. 28, the highest level since Aug. 1. While all 10 groups in the MSCI index increased last month, companies most tied to economic growth had the biggest advances. Technology, financials and consumer discretionary stocks advanced 7.2 percent, 6 percent and 5.9 percent, respectively.

Egyptian Co. for Mobile Services led gains in the MSCI gauge, surging 69 percent, as France Telecom SA agreed to raise its stake in Egypt's second-biggest mobile-network operator. Sears Holdings Corp. jumped 65 percent, the second-biggest advance, after the retailer announced plans to raise as much as $770 million through real-estate sales and a rights offering.

'Cash On Sidelines'

The Standard & Poor's 500 Index returned 4.3 percent in February, including dividends, and closed at 1,372.18 on Feb. 28, the highest level since June 2008. Companies in the benchmark gauge for U.S. equities exceeded analysts' earnings estimates for a 12th straight quarter. The Stoxx Europe 600 Index added 4.2 percent, Japan's Topix Index rallied 11 percent and Brazil's Bovespa climbed 4.3 percent.

"The market's reflecting confidence that the U.S. and emerging economies are going to continue to recover," William Fries, the Santa Fe, New Mexico-based manager of the $28 billion Thornburg International Value Fund, said in a telephone interview on Feb. 27. "Headwinds and adverse publicity have been in the picture, but by and large, companies are doing well. There's lots of cash on the sidelines, and valuations are reasonable. That has people encouraged."