While you were sleeping: BusinessWire overnight wrap

Friday 30th January 2009

Stocks on Wall Street fell after a slew of economic figures dashed prospects for an early revival in the world's biggest economy.

Shares also fell after Ford Motor Co. posted a record fourth-quarter loss of US$5.9 billion and said it had burned through US$5.5 billion of cash in the final three months of 2008. Shares of the second-biggest US automaker fell about 3% to US$1.97 after the results.

The number of Americans on unemployment benefits surged to a record 4.8 million in the week ended January 17, according to Labor Department figures which follow announcements of thousands of job cuts from companies including earth-moving equipment maker Caterpillar and Home Depot. Some 2.6 million jobs disappeared in the US last year.

US orders for durable goods recorded the fifth straight monthly decline in December, the longest losing streak since at least 1992, according to the Commerce Department.

Sales of new homes fell to a record low in December, according to a separate report from the department. Sales slumped to an annual pace of 331,000, less than economists had expected.

The Dow Jones Industrial Average dropped 2.8% to 8138.41 and the Standard & Poor's 500 Index declined 3.4% to 844.84. The Nasdaq Composite fell 3.2% to 1507.8. Banks were among the biggest decliners of the Dow, following a see-saw pattern this week that's seen financials swing from being the biggest gainers to the biggest decliners on the index.

Bank of America fell 5% to US$7.01 and JPMorgan Chase shed 5.1% to US$26.23. Boeing Co. dropped 5.9% to US$40.70, leading the Dow lower, after Russian airline S7 Group canceled an order for 15 Boeing 787 Dreamliners. International Paper Co., once the controlling stakeholder in New Zealand's Carter Holt Harvey, fell 8.4% to US$10.64 after reporting a fourth-quarter loss of US$452 million, amid waning demand.

A strike is looming at US oil refineries, idling as many as 30,000 workers, as the United Steelworkers union prepares to reject a labor contract offer from Royal Dutch Shell.

Prospects of the strike, which will affect refineries processing two-thirds of US capacity according to Bloomberg, helped pare a gain in the price of crude oil, which rose earlier after figures showed rising stockpiles.

Crude oil for March delivery fell 1.9% to US$41.37 a barrel on the New York Mercantile Exchange. US Energy Department figures showed stockpiles rose 1.9% to 338.8 million barrels last week.

Gold futures for April delivery rose 1.9% to US$906.50 an ounce on the New York Mercantile Exchange as sliding stocks boosted the appeal of the precious metal as a haven.

The euro weakened against the yen and US dollar as the prospects of a prolonged global downturn boosted demand for the currencies of the world's two biggest economies as a haven.

The yen rose to 116.53 per euro from 118.88. The dollar rose to 1.2965 from $1.3166. The yen strengthened to 89.91 from 90.26.

In Europe, confidence among company executives and consumers sank to the lowest level on record this month as the region remains mired in recession, despite the combined efforts of the European central Bank and its national counterparts and governments to revive growth.

A European Commission index of executive and consumer sentiment fell to 68.9 this month, from 70.4 in December, while capacity utilization fell to 75.2 in the lastest three months, the lowest in eight years. Further signs of weakness in the region's economy adds to pressure on the ECB to cut interest rates further.

The Dow Jones Stoxx 600 Index fell 1.8% to 190.79, with Irish banks leading the slide after the Sunday Tribune newspaper reported the government in Dublin was considering insuring billions of euros of bad loans on lenders' books. The Irish government has previously said it wants banks to raise capital privately to supplement its aid.

Bank of Ireland fell 19% and Allied Irish Banks shed 18%. Lloyds Banking Group, the biggest gainer of the Stoxx 600 yesterday with a 50% surge, dropped 12% today. UBS declined 9.7%. Xstrata rose 3.6% after announcing plans to raise US$5.9 billion by selling new shares to help reduce debt.

In London, the FTSE 100 Index fell 2.5% to 4190.11 as the Bank of England was authorized by the government to buy up to 50 billion pounds of bonds and commercial paper and prepare to bolster money supply in the shrinking UK economy to thaw access to credit.

In Germany, the DAX 30 fell 2% to 4428.11 after figures showed the number of people out of work jumped by 56,000 to 3.27 million this month, twice the forecast increase. France's CAC 40 fell 2.2% to 3009.75.

The Russian ruble tumbled against the US dollar as the government allowed the currency to devalue and foreign currency reserves shrank in the energy-rich nation. The ruble fell to 34.9835 per dollar, an 11-year low.

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