While you were sleeping: BusinessWire overnight wrap

Friday 1st August 2008

Shares ended lower on Wall Street on Thursday after Exxon Mobil's profit failed to meet expectations and government reports pointed to continuing weak economic growth in the US and lingering labour market woes.

Alan Greenspan, former head of the US Federal Reserve, added to the gloom, saying in a television interview that he'd be surprised if the US avoided a recession.

The Dow Jones industrial average tumbled 205.67 points, or 1.78%, to 11,378.02. The Standard & Poor's 500 Index dropped 16.88 points, or 1.31%, to 1,267.38. The Nasdaq Composite Index slipped 4.17 points, or 0.18%, to 2,325.55.

For the month, the Dow was up 0.25%, while the Nasdaq finished July up 1.42%. The S&P 500 lost 1% in July.

Exxon Mobil Corp's profit miss, coupled with a 2% slide in the price of oil, drove the energy giant's stock down nearly 5%. An index of energy shares fell 2.7%.

Government reports showing weaker-than-expected second-quarter growth and a rise in the number of Americans applying for jobless benefits soured market sentiment and left investors uneasy about the July payrolls report due on Friday.

Caterpillar, Boeing and Walt Disney led the retreat. Caterpillar dropped 3.5%, and Boeing fell 4.3%.

Oil's slide

Oil declined more than 11% in July, its biggest monthly slide since December 2004. On Thursday, the front-month US crude oil contract settled at $124.08, down $2.69 for the day and off sharply from a record above $147 a barrel on July 11.

The bleak economic outlook bolstered US Treasuries. The benchmark 10-year Treasury note's price, which moves inversely to its yield, was up 26/32 for a yield of 3.95%, the lowest in almost two weeks and down from 4.05% late on Wednesday.

The two-year Treasury note was up 8/32 for a yield of 2.52%, down from 2.64% late Wednesday.

Economists' median forecast is for the US July employment report to show a decline of 75,000 non-farm payroll jobs and for the jobless rate to rise to 5.6% from 5.5% the month before.

As for the greenback, the US dollar was little changed at $1.5595 per euro at 4:19pm in New York, compared with $1.5576 on Wednesday. The US currency declined to the record low of $1.6038 on July 15. The euro was little changed at 168.26 yen, compared with 168.41. The dollar dropped 0.2% to 107.90 yen, from 108.13.

The US currency gained 1% versus the euro this month, while climbing 1.6% against the yen. The euro advanced 0.5% versus Japan's currency.

Metals rise

Zinc rose on expectations a decision by China, the largest producer and user of the metal, to remove a tax break on exports will curb supply to global markets.

The metal has lost half its value in the past year, declining to a 2 1/2-year low of $1,750 a metric ton on July 4. Zinc for delivery in three months advanced $30, or 1.6%, to $1,900 a ton as of 4:58pm on the London Metal Exchange.

Copper inventories grew 4,450 tons, or 3.2%, to 142,400 tons, the highest since February 29, according to the exchange's daily data.

The benchmark copper contract added $35, or 0.4%, to $8,065 a ton. It has advanced 21% this year and traded at a record $8,940 a ton on July 2.

By Jonathan Underhill

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