Friday 17th October 2008 |
Text too small? |
Crude oil dropped to below US$70 a barrel as stockpiles rose more than expected as the weakening economic output sapped demand for fuel.
The decline in the price of oil helped lift US stocks for the first time in three days, led retailers Wal-Mart Stores Inc. and McDonald's Corp. on the prospects of fuel costs taking a smaller bite out of household incomes.
The Dow Jones Industrial Average advanced 4.7% to 8979.26 and the Standard & Poor's 500 Index rose 4.3% to 946.43. The NASDAQ Composite gained 5.5% to 1717.71. Up until the advance yesterday, the Dow had tumbled almost 22% this month.
Wal-Mart rose 7.8% to US$53.93, McDonald's gained 4.8% to US$54.12 and Boeing rose 3.2% to US$43.68. Merk jumped 4.2% to US$27.70. Financials weakened, with American Express dropping 4.8% to US$23.24 and Citigroup sliding 2.9% to US$15.77.
The Swiss government yesterday agreed to a US$59 billion rescue for UBS AG, a bank reeling from losses stemming from the credit crisis. UBS will transfer up to US$60 billion of risky assets into a fund backed by the central bank. Meantime, Credit Suisse raised 10 billion francs on its own account after refusing government assistance.
As governments renewed efforts to restore confidence to financial markets, US figures showed investors fled from riskier assets last month. A record $43 billion was withdrawn from hedge funds in September, according to TrimTabs Investment Research.
Investors withdrew $14.4 billion from funds holding toxic securities and $8.4 billion from so-called equity long-short funds, TrimTabs said. Hedge funds fell 4.7% in September, the $1.9 trillion industry's worst month since the collapse of Long-Term Capital Management LP in 1998, Bloomberg reported, citing Hedge Fund Research Inc.
The dollar rose against the euro as the price of crude oil fell. The dollar was at $1.3470 per euro from $1.3499 the previous day. The yen weakened to 101.52 per dollar from 99.96.
US Treasury bonds at the shorter end of the curve fell as stocks rallied, trimming demand for the safest securities. The yield on two-year Treasury notes rose 7 basis points to 1.61%.
Gold futures for December delivery fell 4.1% to US$804.50 an ounce on the New York Mercantile Exchange.
In Europe, sliding stocks sent the Dow Jones Stoxx 600 Index to its biggest two-day drop since 1987 amid mounting concern concerted financial support from governments in the US and Europe won't avert a global economic slump.
Rio Tinto fell 13%, oil company Total declined 9.2% and Barclays slid 11%. The UK's FTSE 100 fell 5.4% and Germany's DAX dropped 4.9%.
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes