While you were sleeping: BusinessWire overnight wrap

Wednesday 27th August 2008

Energy shares gained, helping both the Dow and the S&P 500 advance on Tuesday even amid lingering concerns about the outlook for the US financial sector.

US crude oil, which at one point broke above US$117 a barrel, ended up 1% on fear that Hurricane Gustav could disrupt output in the US Gulf. Shares of Exxon Mobil rose 1.6% to $US79.95.

Not everyone was energised. A report from the US Federal Deposit Insurance Corporation said 117 US banks were on its troubled banks list at the end of the second quarter, up from 90 after the first three months of the year.

More importantly the FDIC said the assets of the banks on the problem list reached US$78.3 billion through June, up from US$26.3 billion at the end of the first quarter.

The Dow Jones industrial average was up 26.62 points, or 0.23%, at 11,412.87. The Standard & Poor's 500 Index was up 4.66 points, or 0.37%, at 1,271.50. The Nasdaq Composite Index was down 3.62 points, or 0.15%, at 2,361.97.

Trading on the NYSE was the slowest of the year for the fourth straight day, with about 856 million shares changing hands. Volume since the start of last week has been more than one-third lower than the year-to-date average.

Anadarko Petroleum jumped US$3.70 to US$61.54, the highest since July 22. The second-largest independent US oil producer plans to buy back as much as US$5 billion of its stock.

EOG Resources, a Houston-based oil and gas producer, climbed US$5.55 to US$107.76. Sanford C Bernstein analyst Ben Dell upgraded EOG to "outperform" from "market perform" based on the potential for gas prices to climb.

Plans by Coach Inc to buy back shares helped its stock rise 6.7% to US$28.18. The largest US maker of luxury leather handbags may repurchase as much as US$1 billion of its shares by June 26, 2010.

On the economic front, new home-sales in the US increased 2.4% to a 515,000 annual pace in July after a downwardly revised 503,000 rate in June, the Commerce Department said. The number of unsold homes on the market fell 5.2%, the most since November 1963, to a 416,000 pace.

The Conference Board's consumer confidence index rose to 56.9 in August from 51.9 in July as cheaper gasoline improved Americans' moods. June's reading of 51 was the lowest since February 1992. The median forecast was for a smaller increase to 53, the median estimate of 70 economists surveyed by Bloomberg News.

In late trading, 10-year US Treasuries were down 1/32 in price for a yield of 3.78%, unchanged from Monday. Two-year notes were down 1/32 lower in price for a yield of 2.34%, up from 2.33%.

Dealers positioned for big supplies on the way, with the Treasury set to auction a record high US$32 billion in two-year notes on Wednesday and US$22 billion in five-year notes on Thursday.

The US currency is headed for the biggest monthly gain since the 15-nation euro debuted in 1999, increasing to an 11-month high versus the Australian dollar and gaining versus the New Zealand dollar and the Swedish krona.

Against the euro, the dollar increased 0.8% to US$1.4644 at 4:02 p.m. in New York, from US$1.4754 yesterday. It touched US$1.4571, the strongest level since February 14. The dollar rose 0.3% to 109.64 yen, from 109.30. The euro fell 0.4% to 160.55 yen, from 161.26 yesterday, after reaching 159.99, the lowest level since May 12.

Canada's dollar was the only major currency to gain against the dollar today, rising as much as 1% to a three-week high of US$1.0412 per dollar. Commodities such as gold and oil account for half of Canada's exports.

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