Emerging Markets Rebound

The MSCI gauge of 21 emerging markets recovered more than one-third of last week’s 3.4 percent drop that left the index trading at 13.8 times earnings, the lowest level since August, data compiled by Bloomberg show. The Bombay Stock Exchange’s Sensitive Index rallied 2.7 percent, led by Tata Motors Ltd., the nation’s biggest truckmaker, after profit more than tripled.

The S&P 500 last week closed at the highest level since June 2008 and a valuation of about 15.9 times its companies reported operating earnings, the most-expensive in almost eight months. Wal-Mart Stores Inc., the world’s biggest retailer, lost 1.2 percent today as JPMorgan Chase & Co. cut its recommendation to “neutral” from “overweight.”

President Barack Obama will send Congress a $3.7 trillion budget that would reduce deficits by $1.1 trillion over a decade, setting up a battle with Republicans who have already deemed the plan insufficient to reduce federal debt. The deficit for the current fiscal year is forecast to hit a record $1.6 trillion -- 10.9 percent of gross domestic product -- up from $1.4 trillion the administration estimated previously, according to documents released this morning by the administration.