By Paulo Winterstein and James Attwood

June 13 (Bloomberg) -- Brazil's main stock index gained for the third time in four days, boosted by a report that retail sales in the U.S., the South American country's biggest trade partner, rose the most in a year last month.

The Bovespa index of the most-traded stocks on the Sao Paulo exchange rose 1005, or 1.9 percent, to 52,803.12 as of 2:13 p.m. New York time. Petroleo Brasileiro SA, the state-controlled oil company, led the gain.

``Global growth is very important for Brazil,'' said Roseli Machado, who helps manage about $848 million in bonds and shares for Fator Administracao de Recursos in Sao Paulo. The stronger than-expected retail report from the U.S. ``without a doubt is helpful.''

The 1.4 percent increase in U.S. retail sales last month, reported today by the Commerce Department, was twice the median forecast in a Bloomberg News survey of economists. The Labor Department reported that import prices climbed 0.9 percent, also more than analysts predicted.

The Bovespa index was also supported by a drop in the yield of U.S. 10-year treasury notes from a five-year high. Yields retreated as some investors bet they had climbed too quickly yesterday, Machado said in an interview. The market ``is going to be erratic and volatile until investors see more clearly what the range for 10-year notes will be.''

Petrobras rose 62 centavos, or 1.3 percent, to 48.74 reais. Crude oil prices gained 1.5 percent to $66.33 a barrel in New York after a government report showed that U.S. supplies of the motor fuel increased less than expected last week.

Steelmaker

Gerdau SA, Latin America's biggest steelmaker, climbed 1.84 real, or 4.1 percent, to 46.34 reais. UBS Pactual analysts Edmo Chagas and Carlos Vasques raised their target price to 60 reais from 50 reais on prospects that higher sales volume and prices in Brazil and the rest of Latin America will boost second-quarter earnings.

Colombia's main stock index rose 1.9 percent to 10,452.10, led by Bancolombia SA, the country's biggest lender by assets, after the Lower House approved a bill that extends a cap on public spending.

``The one thing the ratings agencies and most of the analysts have been angling for Colombia to do is to get more control over spending,'' Rupert Stebbings, a trader at Medellin- based brokerage Asesores en Valores, said by phone.

After eight debates, Colombia's Lower House last night approved a bill that extends a cap on funds the central government transfers to local authorities to provide education, water and health services. Bancolombia surged 5.3 percent to 14,840 pesos. Its American depositary receipts rose 4.9 percent to $30.49.

Profit Jump

Stebbings said the bank also benefited from an 11 percent profit jump in the first five months of the year and UBS Pactual lifting its price forecast for the ADRs by 17 percent to $42.50.

The ADRs are ``the only realistic way to play Colombia'' after the introduction last month of capital controls on foreign inflows, UBS analysts wrote in a report yesterday.

Mexico's Bolsa index was little changed as retailer Wal-Mart de Mexico SA rose and fixed-line telephone company Telefonos de Mexico SA declined. The Bolsa index retreated 21.43, or less than 0.1 percent, to 31,587.16.

Telmex, as the company is known, was cut to ``hold'' from ``buy'' by analyst Patrick Grenham at Citigroup Investment Research. A ``reluctant downgrade'' is called for, as rising yields make bonds more attractive than shares of Telmex, Grenham wrote in an e-mailed report. Telmex shares fell 22 centavos, or 1 percent, to 21.28 pesos. Carso Global Telecom SA, a company that holds Telmex shares, slid 0.3 percent to 59.35 pesos.

Telmex

``The market should be gaining more on falling bond yields, but the only thing is the Telmex downgrade at Citigroup,'' said analyst Alejandro Fuentes Perez at BBVA Bancomer in Mexico City.

In other Latin American markets, the main indexes in Argentina, Chile and Peru rose, while Venezuela's IBVC index fell. The Morgan Stanley Capital International index of Latin American shares rose 0.6 percent, to 3644.31.

The following are the most-active stocks in Latin American markets today. In Brazil, the preferred share is usually the company's most-traded class of stock.

Brazil

Cia. Vale do Rio Doce (VALE5 BS), the world's biggest iron- ore and nickel producer, rose 48 centavos, or 0.7 percent, to 71.48 reais. Vale plans to start building the southern hemisphere's biggest coal mine this year after receiving approval from Mozambique's government. Construction of the Moatize mine is expected to start in the second half of 2007, with output to begin in 2010, Roberto Castello Branco, head of investor relations, said today at a conference in Toronto.

Tam SA (TAMM4 BS), Brazil's biggest airline by market share, fell 33 centavos, or 0.5 percent, to 63.72 reais. CreditSights analysts including Aidas Baublys said a falling load factor, or the percentage of seats filled on flights, continues to be a concern for Brazilian airlines as capacity outpaces demand. Seat occupancy for Tam's international flights in May fell 5.3 percentage points from a year earlier to 69 percent, the analysts said in an e-mailed note.

Votoroantim Celulose & Papel SA (VCPA4 BS), Brazil's third- largest pulp and paper producer, rose 96 centavos, or 2.3 percent, to 42.86 reais. Pulp prices are likely to stay high this year until production increases at the end of the year catch up with demand, Socopa Corretora analyst Daniel Doll Lemos wrote in an e-mailed note. Lemos recommends VCP and Klabin SA, the country's largest paper producer. Klabin (KLBN4 BS) shares gained 11 centavos, or 1.8 percent, to 6.38 reais.

Chile

Enersis SA (ENERSIS CC), owner of Chile's biggest power producer Empresa Nacional de Electricidad SA, rose 2.85 pesos, or 1.5 percent, to 199.93 pesos. Enersis's power distribution ability ``makes it a bit more defensive'' when Chile's power generation industry faces lower-than-average rainfall and gas supply cuts, Brain Chase, an analyst at UBS Pactual in Santiago, said by phone.

Madeco SA (MADECO CC) rose 1.70 pesos, or 2.4 percent, to 72.50 pesos. Chile's biggest maker of copper wire is Santiago- based Santander Investment's ``top pick'' due to its low valuation, analysts including Raimundo Valdes wrote a report yesterday. Madeco ``should benefit from the positive outlook for its wire and cable unit in Brazil, given the strong investments in the energy sector in that country,'' they wrote.

Mexico

Grupo Lamosa SAB (LAMOSA* MM), a real estate and building materials company, climbed 53 centavos, or 3.1 percent, to 17.80 pesos. Lamosa sold two malls in the northern city of Monterrey to Prudential Real Estate Investors for 1.8 billion pesos ($164 million). The malls had combined sales of 204 million pesos in the 12 months through March, Lamosa said in a statement filed with the Mexican stock exchange.

Grupo Televisa SA (TLEVICPO MM), the world's largest Spanish-language media company, gained 40 centavos, or 0.7 percent, to 59.35 pesos. Miller Tabak & Co. analyst David C. Joyce raised his recommendation on the shares to ``buy'' from ``neutral.'' Concern over the impact of a high court ruling striking down key sections of a media law are ``overblown,'' Joyce wrote in a report e-mailed today.

Wal-Mart de Mexico SA (WALMEXV MM), Latin America's largest retailer, rose 25 centavos, or 0.6 percent, to 42.78 pesos. May sales at stores of Wal-Mart competitors open at least a year fell 1.6 percent from a year earlier, according to Mexico's largest retail association. Walmex is performing better than rivals, BBVA Bancomer analysts wrote in a research note, in which they reiterated their ``buy'' recommendation on the stock.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at at pwinterstein@bloomberg.net ; James Attwood in Santiago at jattwood3@bloomberg.net