While you were sleeping: BusinessWire overnight wrap

Tuesday 11th November 2008

Stocks on Wall Street fell, with General Motors shedding more than a fifth of its value after Deutsche Bank cut the largest US automaker's equity value to zero, saying it may not be able to fund its business beyond the end of the year.

Google dropped about 6% on concern revenue growth will stall and Goldman Sachs tumbled 12% amid speculation slumping markets will wipe out its earnings.

The Dow Jones Industrial Average declined 1.7% to 8789.54 and the Standard & Poor's 500 Index fell 2.2% to 910.31. The Nasdaq Composite slid 2.4% to 1608.50.

American International Group received a US$150 billion package of government aid, about doubling the first bailout it got in September. The insurer reported a US$24.5 billion third-quarter loss overnight. Among the latest casualties of the US economic slump and global credit freeze, electronics chain Circuit City Stores filed for bankruptcy protection, the biggest retailer yet to fail in the current financial rout.

Fannie Mae, the biggest source of funding for home loans in the US, posted a record US$29 billion loss in the third quarter and warned it may need to additional government funds to survive because of the speed of its losses. The housing recession could wipe out its net worth by the end of the year after it wrote down the value of deferred tax losses.

US Treasury bonds rose as stocks fell and a sale of three-year notes drew more demand than expected. The yield on two-year notes fell 8 basis points to 1.25%, an eight-month low. The yield on 10-year bonds fell 4 basis points to 3.75%.

US commercial paper interest rates fell to a 12-year low. Rates on 30-day commercial paper dropped 0.16 percentage point to 0.88 percent, Bloomberg reported.

President-elect Barack Obama met President George Bush for a tour of the White House and an hour-long private meeting.

Crude oil rose in New York on the prospects that China's US$586 billion stimulus package will help underpin growth in the world's No. 4 economy and help lift demand for fuel. Crude oil for December delivery rose 2.2% to US$62.40 a barrel on the New York Mercantile Exchange.

China's move also helped boost copper, which gained more than 5% on speculation demand for the metal won't falter in the nation which is the world's biggest consumer of metals.

Copper futures for December delivery rose 5.2% to US$1.785 a pound in New York and earlier reached as high as US$1.89. The Reuters/Jefferies CRB Index of 19 commodities gained 2.3%.

Gold futures for December delivery rose 1.7% to US$746.50 an ounce on the New York Mercantile Exchange and silver rose 2.6% to US$10.22 an ounce.

The yen rose against the US dollar as stocks fell, stoking risk aversion and prompting some investors to reverse positions in higher-yielding assets funded with loans in Japan's currency. The yen increased to 97.85 against the dollar from 98.24 on Friday. The euro rose 0.3 percent to $1.2760 from $1.2718.

Stocks in Europe gained yesterday on optimism about China's stimulus package. BHP Billiton and Rio Tinto jumped, following gains in their Australian shares, on speculation demand for their commodities won't falter in China.

The Dow Jones Stoxx 600Index gained 0.6% to 220.96. Germany's DAX 30 rose 1.8% to 5025.53, which Deutsche Post climbing about 7% after confirming its target for annual profit. France's CAC 40 rose 1.1% to 3505.75. In London, the FTSE 100 Index rose 0.9% to 4403.92.

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