While you were sleeping: BusinessWire overnight wrap

Tuesday 13th January 2009

Stocks on Wall Street dropped amid concern companies are set to post weak fourth-quarter earnings and as a drop in the price of crude oil weighed on energy shares.

Citigroup, which is negotiating to sell its brokerage unit, tumbled 19% to US$5.47 and Bank of America fell 12% to US$11.43, leading the Dow Jones Industrial Average down 1.9% to 8438.77. The Standard & Poor's 500 Index slipped 2.7% to 866.46 and the Nasdaq Composite fell 2.3% to 1535.55.

Aluminium producer Alcoa Inc., which was scheduled to report earnings today, fell 7.8% to US$9.97 after Deutsche Bank put a 'sell' rating on the stock on concern profit will deteriorate.

ConocoPhillips fell 3.5% to US$50.16, Chevron declined 2.6% to US$70.98 and Exxon Mobil dropped 1.3% to US$76.56 after crude oil fell on concern the prolonged economic slump will render OPEC's production cuts ineffective in underpinning prices.

Crude oil for February delivery fell 6.8% to US$38.07 a barrel on the New York Mercantile Exchange. Oil has dropped about 60% in the past 12 months.

The Reuters Jefferies CRB Futures Price Index of 19 commodities fell about 2% to 225.37 to 221.11. Copper had its biggest decline in a month on concern weaker economies are buying less of the metal. Inventories rose 1.6% to 369,500 metric tons, according to figures from the London Metal Exchange.

Copper futures for March delivery fell 5.6% to US$1.472 a pound in New York. Copper also fell after China abandoned plans to buy additional metal for its domestic smelters on the prospects prices will go even lower.

Gold futures for February delivery fell 4% to US$821 an ounce on the New York Mercantile Exchange.

The US Department of Agriculture raised its forecasts for stockpiles of wheat and corn, sending prices lower on the Chicago Board of Trade. Global wheat inventories may rise to 148.4 million metric tons by May 31 and corn may reach 136 million tons.

Rising stockpiles of wheat sent the food ingredient down 9.5% to US$5.6975 a bushel on the Chicago Board of Trade. Corn futures for March delivery fell 7.3% to US$3.8075 a bushel and soybeans fell 6.7% to US$9.665 a bushel.

President George Bush agreed to seek the remaining half of the US$700 billion Trouble Asset Relief Program, or TARP, funds after a request from President-elect Barack Obama.

The request comes as Citigroup negotiates the sale of its Smith Barney brokerage unit to Morgan Stanley, gaining funds to top up diminished capital reserves. Citigroup may book a gain of US$10 billion from the sale, according to Bloomberg, which cited a person familiar with the talks.

US Treasury bonds rose as stocks fell and in anticipation that reports this week will show a decline in US retail sales and consumer prices.

The yield on 10-year Treasury notes fell 8 basis points to 2.31%. The yield on 30-year Treasuries fell 7 basis points to 2.99%.

European stocks also fell on concern about dwindling profits and slowing demand for raw materials. The Dow Jones Stoxx 600 index fell 1.6% to 204.53. Swiss bank UBS AG fell 6.2% after SonntagsZeitung reported that it would post a fourth-quarter loss of 8 billion francs.

The DAX 30 fell 1.3% to 4719.62, with Volkswagen declining 8.4% and Infineon sliding 5.7%. In London, the FTSE 100 Index declined 0.5% to 4426.19 as weaker prices for metals and oil drove BHP Billiton and BP Plc down more than 1%.

France's CAC 40 sank 1.6% to 3246.12 as STMicroelectronics dropped 5.5% after UBS AG cut the shares of Europe's biggest computer-chip maker to 'sell.'

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