While you were sleeping: BusinessWire overnight wrap

Tuesday 21st October 2008

Stocks on Wall Street rose, led by Chevron and Exxon Mobil after the price of crude oil gained more than US$2 a barrel on speculation OPEC will reduce production and Halliburton's profit beat estimates.

Stocks also gained after Federal Reserve Chairman Ben Bernanke backed a proposal for an additional economic stimulus package. House Speaker Nancy Pelosi has called for as much as $150 billion to help underpin credit markets. The White House is "open to the idea" of another package, pending its approval by the Congress, according to spokeswoman Dana Perino.

The three-month Libor rate had the biggest decline in nine months in a sign concerted government efforts in the US and Europe are beginning to thaw credit markets and encourage banks to lend to each other.

About half of the US$250 billion of funds the US Treasury is dispensing to banks has already been committed and Treasury Secretary Henry Paulson urged banks to resume lending with the fresh funds rather than horde dollars.

The Dow Jones Industrial Average rose 2.8% to 9094.79 and the Standard & Poor's 500 Index gained 2.9% to 968.07. The NASDAQ Composite rose 1.7% to 1741.07.

Chevron advanced 8.4% to US$67.51 and Exxon gained 7.5% to US$73.15. Merck rose 7% to US$30.50 and Walt Disney gained 5.2% to US$26.06.

The prospects of additional stimulus helped lift the US dollar against the euro. The dollar gained to $1.3322 per euro, from $1.3410 on Friday. It traded at 101.71 yen, compared with 101.69.

Crude oil rose after OPEC President Chakib Khelil said the cartel may reduce output by as much as 2 million barrels a day to stem a slide in prices. Deutsche Bank cut its 2009 oil forecast by 35% to US$60 a barrel, citing the risk of a global recession, Bloomberg reported.

Crude oil for November delivery rose 3.3% to US$74.25 a barrel on the New York Mercantile Exchange. Gold rose as some investors bought the precious metal after it slid to a month-low. Gold futures for December delivery rose 0.3% to US$790 an ounce in New York.

Copper fell after China posted the weakest economic growth in five years, stoking concern demand will abate in the world's biggest consumer of metals. Copper futures for December delivery fell 2.9% to US$2.1165 a pound in New York and has halved in value from its record US$4.2605 a pound in May.

US Treasuries fell, heading for a monthly loss, as stocks gained, reducing the appeal of government debt as a haven. The yield on two-year Treasury notes gained 10 basis points to 1.71% percent. The 10-year yield fell about 9 basis points to 3.85%.

European stocks rose, sending the Dow Jones Stoxx 600 Index up 3.6% as energy shares gained with crude oil and Ericsson AB posted better than expected earnings. ING Groep surged 29% after the lender gained a 10 billion euro bailout from the Dutch government. Royal Dutch Shell advanced more than 7%.

The UK's FTSE 100 added 5.4%, France's CAC 40 rose 3.6% and Germany's DAX Index rose 1.1%.

As the impact of the credit crunch widened, the reserve Bank of India cut overnight lending rate for the first time in four years. The central bank lowered the rate to 8% from 9%.

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