While you were sleeping: BusinessWire overnight wrap

Tuesday 4th November 2008

US manufacturing had the biggest slump in 26 years last month on weakening world demand for exports and a squeeze on credit at home.

The Institute for Supply Management's index of national factory activity fell to 38.9 from 43.5 in September, well below the 50 level which separates a contraction from an expansion.

Crude oil fell more than US$3 a barrel the ISM report. Crude oil for December delivery fell 5.8% to US$63.91 a barrel on the New York Mercantile Exchange, amid concern demand will weaken as the world�s biggest economy slows. Crude is now down almost 60% from its record high US$147.27 reached in July.

Stocks on Wall Street swung between gains and losses, with the Dow Jones Industrial Average snapping two days of gains to fall 0.7% to 9266.55. Walt Disney dropped 5.7% to US$24.43 after Merrill Lynch said its earnings may be hurt by the slowing economy. Home Depot declined 4.8% to US$22.45. The Standard & Poor�s 500 Index fell 0.9% to 959.62 and the Nasdaq Composite fell 0.3% to 1715.43.

AT&T Inc. rose 4.7% to US$28.03 and Verizon Communications Inc. gained 3.2% to US$30.61 after Wachovia Corp. said they represented good value after recent declines.

Automakers reported US sales tumbled last month as consumers found it harder to get finance and a slowing economy sapped demand. General Motors said sales of cars and light trucks dropped 45% from a year earlier. Its shares fell 4.5% to US$5.52. Ford posted a 30% drop in sales, helping nudge its shares 1.4% lower to US$2.16.

Among Japanese automakers, Toyota Motor reported a 23% decline, Honda Motor�s sales slid 25% and Nissan Motor's tumbled 33%.

KKR & Co., the leveraged buy-out firm founded by Henry Kravis, delayed plans to go public for a second time amid losses in credit and stock markets. The transaction won�t be completed until some time next year, pushed back from the end of this year, the firm said in a statement.

In another sign of the ongoing impact of the financial crisis, Merrill Lynch analyst Guy Moszkowski predicted that Goldman Sachs would report a fourth-quarter loss because of slumping stock markets. That would mark the first quarterly loss at Merrill since it went public in 1999.

The yen fell against the dollar after a decline in interbank borrowing costs gave investors more comfort to buy higher-yielding assets funded with loans in Japan�s currency.

The yen fell to 99.05 per dollar in New York from 98.46 on Friday. The euro dropped to $1.2640 from $1.2726. The yen traded at 124.91 per euro from 125.30.

The London interbank offered rate, or Libor for three-month loans in US dollars fell 0.17 percentage points to 2.86%, the lowest since before the collapse of Lehman Brothers.

European finance ministers, meeting to agree further coordinated efforts to revive the region�s economy, said Europe faces a difficult year. The European Commission cut its forecast for growth in the region, predicted it would stall in 2009.

Stocks in Europe rose for a fifth straight day on optimism about falling money market rates. The Dow Jones Stoxx 600 Index gained 0.6% to 223.38. That was the longest winning streak in about a year.

ING Groep rose 5.2% and Swiss Reinsurance advanced 6.3%. HBOS rose 6.1% amid speculation it may receive a takeover offer rivaling one from Lloyds TSB Group.

Germany�s DAX 30 rose 0.8% to 5026.84, with Deutsche Post climbing 10% to 9.55 euros and Infineon fell about 10% to 2.7 euros. The UK�s FTSE 100 gained 1.5% to 4443.28 and France�s CAC 40 rose 1.2% to 3527.97.

Gold rose, snapping three days of declines, as its recent slide attracted buyers. Gold futures for December delivery rose 1.2% to US$726.80 an ounce in New York.

BusinessWire.co.nz

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