While you were sleeping: BusinessWire overnight wrap

Friday 21st November 2008

Stocks on Wall Street declined after reports showing rising jobless claims and waning manufacturing output stoked concern the world's biggest economy is heading for a prolonged slump.

Jobless claims rose to the highest level since 1982 while a Federal Reserve report showed manufacturing in the Philadelphia area contracted at the fastest pace in 18 years this month.

The Conference Board's index of leading US economic indicators fell a greater-than-forecast 0.8% in October.

The Standard & Poor's 500 Index declined 4.2% to 773.03. The Dow Jones Industrial Average slipped 3.6% to 7711.42 and the Nasdaq Composite fell 3.2% to 1341.82.

More than $32 trillion has been wiped off the value of global stocks this year amid the widening credit and financial crisis.

Citigroup tumbled 19% to US$5.21 and earlier dropped as much as 25% amid concern the economic slump will further weigh on financial companies. The stock decline even after Saudi billionaire Prince Alwaleed bin Tala said he would increase his stake in the firm. JPMorgan Chase fell 11% to US$25.20. The largest US bank plans to eliminate 10% of its investment banking staff, about 3,000 people, Bloomberg reported, citing a person familiar with the plan.

The US government may have to spend US$1.2 trillion to strengthen the nation's eight biggest financial institutions, according to an analyst at FBR Capital Markets.

General Motors rose 8.6% to US$3.03, paring an earlier gain after Democratic congressional leaders said they will put off acting on a compromise rescue plan for automakers until at least next month. GM has said it may run short of cash by the end of the year.

Alcoa slipped 11% to US$7.25 and General Electric fell 6.4% to US$13.53. Oil companies fell as the price of crude oil slipped below US$50 a barrel for the first time in two years on speculation the economic slump will curb demand for fuel. Chesapeake Energy Corp. fell more than 13%.

Copper prices fell to the lowest level in more than three years as the economic slump dented demand for industrial metals. Copper futures for March delivery fell 1.8% to US$1.58 a pound on the New York Mercantile Exchange. The Reuters/Jefferies CRB Index of 19 raw materials has tumbled more than 50% since reaching a record in July.

Gold advanced for a second day. The gold futures for December delivery rose 1.7% to US$748.70 an ounce on the New York Mercantile Exchange.

The US dollar fell against the euro and yen. It traded at $1.2502 per euro in New York from $1.2489. The dollar traded at 94.80 yen from 95.73.

Stocks in Europe fell, pushing the Dow Jones Stoxx 600 Index to a five-year low amid widening fears of the impact of a global recession. ING Groep dropped more than 8%.

Resources companies led the FTSE 100 Index lower. BHP Billiton fell 8.7% and Rio Tinto dropped 10%. Among insurance companies, Prudential declined 16%. Aviva fell 17%.

The DAX 30 Index fell 3.1% to 4220.2 in Germany, paced by 9% slide in Deutsche Bank. France's CAC 40 fell 3.5% to 2980.42.

Comments from our readers

No comments yet