* LatAm stocks follows U.S. rally on strong earnings 
    * Improved U.S. data revives optimism, risk appetite 
    * Currencies up on U.S. dollar weakness 
    * Colombia's Ecopetrol to price 10-yr bond at UST+425 bps 
    
    By Manuela Badawy 
    NEW YORK, July 15 (Reuters) - Latin American stocks rallied 
to a two-week high, currencies rose, and bond spreads narrowed 
on Wednesday on positive U.S. corporate earnings and signs U.S. 
industrial production may be improving. 
    The improving outlook for the U.S. economy, supported by a 
better-than-expected report on business conditions in New York 
state, and a year-high reading on a U.S. factory survey, pushed 
investors to buy up risky assets like emerging stocks bonds and 
currencies. 
    The MSCI stock index for Latin America <.MILA00000PUS> 
surged 6.0 percent to a two-week high, outperforming gains of 
3.1 percent in the Dow Jones Industrial Average <.DJI>. 
    U.S. stocks rallied after Intel Corp's <INTC.O> solid 
results and upbeat outlook reinforced hopes for a rebound in 
technology spending. 
     The Brazilian benchmark Bovespa index <.BVSP> jumped 5.25 
percent to a one-week high as investors revived a bid for risk 
after upbeat U.S. data. 
    "The Brazilian markets tend to follow the markets abroad," 
said Marianna Costa, an economist with Link Investimentos in 
Brazil. Good news in the United States often translates to 
higher investor confidence in emerging economies as well. 
    Mexico's IPC stock index <.MXX> sharply rose 3.33 percent, 
while Argentina's MerVal index <.MERV> surged 4.83 percent. 
    Chile' The blue-chip IPSA index <.IPSA> rose 1.31 percent 
on the day and is up 34 percent so far this year, helped by a 
16 percent jump in May, its biggest gain in a single month 
since January 1994. Chile's all-market IGPA index <.IGPA> rose 
1.16 percent. 
    Most Latin American currencies also experienced a sharp 
appreciation amid an overall decline in the U.S. dollar against 
a basket of major currencies to the lowest level in a month. 
     Brazil's currency, the real <BRBY>, rose 1.81 percent to 
1.935 reais to the dollar after its central bank offered to buy 
dollars to soak up an inflow of greenbacks into the country. 
    Chile's peso <CLP=CL> ended 1.96 percent firmer at 
536.70/537.20 per dollar. 
    The Mexican peso <MXN=> surged 2.25 percent to 13.533 per 
dollar snapping a six-session losing streak. 
    The U.S. downturn has driven Mexico into a deep recession 
and hopes for a local recovery depend on a rebound in demand in 
the United States, the destination for around 80 percent of 
Mexican exports. 
    Mexico's central bank will likely lower interest rates by a 
quarter percentage point on Friday to support the ailing 
economy, but could also signal it is done loosening monetary 
policy. The cut would bring Mexico's benchmark overnight rate 
to 4.50 percent <MXCBIR=ECI>, its lowest since 2003. 
    Meanwhile, yield spreads between emerging-market sovereign 
bonds and U.S. Treasuries, a key gauge of risk aversion, 
tightened 15 basis points to 416 basis points according to the 
JPMorgan EMBI+ index <11EMJ>. 
    Colombia's state-controlled oil company Ecopetrol issued a 
10-year $1.5-billion bond <ECO.CN><EC.N> with a price guidance 
of around 400-425 basis points over U.S. Treasuries. Proceeds 
of the deal will be used to fund Ecopetrol's investment plans. 
    (Additional reporting by Luciana Lopez in Sao Paulo) 
     
    
    Latin American market prices from Reuters            
            
Stock indexes                       Latest        % change 
            
---------------------------------------------------------- 
MSCI LatAm <.MILA00000PUS>        2,987.21           5.9 
Brazil Bovespa     <.BVSP>       51,355.97           5.08 
Mexico IPC          <.MXX>       25,145.80           3.31 
Chile IPSA         <.IPSA>        3,200.17           1.43 
Chile IGPA         <.IGPA>       15,183.01           1.26 
Argentina MerVal   <.MERV>        1,609.88           4.85 
Colombia IGBC      <.IGBC>        9,747.12           0.56 
Peru IGRA          <.IGRA>       13,108.70           1.91 
Venezuela IBC       <.IBC>       45,418.17           0.81 
            
Currencies                          Latest        Local forex 
                                                  % change 
-----------------------------------------------------------     
       
Brazil real       <BRBY>            1.9350           1.81 
Mexico peso       <MXN=>           13.5395           2.18 
Argentina peso*  <ARSB=>            3.8600          -0.45 
Chile peso      <CLP=CL>          537.2000           1.95 
Colombia peso   <COP=STFX>      2,019.0000           1.34 
Peru sol        <PEN=PE>            3.0130           0.37 
* Argentine peso's rate between brokerages            
            
Global sovereign bonds         Bid price        Bid change 
----------------------------------------------------------      
      
Brazil 2040    <BRAGLB40=RR>     130.625            -0.063 
Mexico 2017    <MEXGLB17=RR>     101.188            -0.187 
Argentina Disc <ARGGLB33=RR>      51.625             0.750 
Venezuela 2027 <VENGLB27=RR>      65.125            -0.375 
Ecuador 2015   <ECUGLB15=RR>      72.000            -2.125 
            
Sovereign CDS-5 years            Latest        % pt change 
----------------------------------------------------------      
      
Brazil    <BRGV5YUSAC=MG>        169.000            -6.778 
Mexico    <MXGV5YUSAC=MG>        218.160            -7.949 
Argentina <ARGV5YUSAC=MG>          0.000             0.000 
Venezuela <VEGV5YUSAC=MG>      1,517.500            12.798 
 
    
Keywords: MARKETS EMERGING/