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While you were sleeping: BusinessWire overnight wrap

Wednesday 24th December 2008

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U.S. home sales tumbled by the most in 21 years last month, indicating a deeper slump in the world's biggest economy.

Sales and prices of existing U.S. homes fell at a record pace in November. The median resale price fell 13%, the most since records began in 1968, according to the National Association of Realtors said.

Stocks on Wall Street fell for a second day amid speculation federal government aid won't be enough to revive automakers such as General Motors and Chrysler. GM fell 16% to US$2.95, leading a 1.1% slide in the Dow Jones Industrial Average to 8420.13. Ford fell more than 15%.

GM faces a high likelihood of bankruptcy, according to Standard & Poor's, which cut the rating on the automaker's debt further into junk territory to C. That's 11 levels below investment grade.

Adding to GM's woes this week was the forecast operating loss by Toyota, the first in its history, on weakening global sales. Toyota President Katsuaki Watanabe may step down next year and be replaced by Akio Toyoda, grandson of the automaker's founded, Bloomberg reported.

The Standard & Poor's 500 Index declined 0.7% to 865.2 and the Nasdaq Composite fell 0.9% to 1517.8. Bank of America declined 3.8% to US$13.02 and Citigroup fell 2.2% to US$6.59.

American Express became the latest recipient of federal funds, with US$3.39 billion from the government's US$700 billion Troubled Asset Relief Program, or TARP fund. The credit card company's shares fell 0.9% to US$18.25.

Buyout firm Cerberus Capital Management suspended withdrawals from its Cerberus Partners Fund, according to CNBC, which said the halt to redemptions could be in place for up to a year.

The U.S. dollar slipped against the euro after U.S. government figures confirmed the economy contracted in the third quarter.

Further evidence of the U.S. economic slump helped drive down the price of crude oil. Traders have doubted OPEC's ability to put a brake on production and stop crude from sliding.

Crude has been below US$40 a barrel, suggesting little ongoing price inflation. Contracts for February delivery fell 2.3% to US$39.01 a barrel on the New York Mercantile Exchange bringing the slide this year to about 60% on expectation demand for fuel is waning.

The price of copper slid further as slowing demand fattened inventories of the metal. Copper futures for March delivery fell 4.8% to US$1.281 a pound in New York.

In Europe, the Dax 30 fell 0.2% to 4629.38 in Germany and the CAC 40 fell 0.7% to 3128.41. The FTSE 100 slid o.2% to 4255.98.

By Jonathan Underhill

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