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While you were sleeping: BusinessWire overnight wrap

Wednesday 30th July 2008

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Wall Street advanced more than 2% as investors were buoyed by another drop in the price of oil, which is now trading close to a three-month low.

Stocks also got a boost from a private report showing that US consumer confidence was steadying after a six-month slide and a rethink of Merrill Lynch's latest moves - writedown and capital raising - as a sign that the credit crisis might be at a turning point.

The Standard & Poor's 500 Index added 28.83, or 2.3%, to 1,263.2. The Dow Jones Industrial Average gained 266.48, or 2.4%, to 11,397.56. The Nasdaq Composite Index increased 55.4 to 2,319.62. More than four stocks rose for each that fell on the New York Stock Exchange.

As oil fell, it gave another boost to industrial materials makers. It also helped that U.S. Steel posted solid results.

US Steel, the second-largest US-based steelmaker by market value, gained $20.43 to $165.76. Excluding certain items, per-share profit was $5.67 in the second quarter, topping the $3.82 average estimate of 14 analysts in a Bloomberg survey.

AK Steel Holding Corp, the fourth-largest U.S.-based steelmaker, climbed $7.05, or 14%, to $57.37. The S&P 500 Steel Index jumped 9%, its steepest advance since October 2002.

The drop in crude sent the S&P 500 Retailing Index up 4% as all 29 companies in the group advanced, led by Dillard's Inc. The Amex Airlines Index rallied 11%.

General Motors climbed 90 cents, or 8.2%, to $11.90 and McDonald's added $1.91 to $59.70. AMR Corp, parent of American Airlines, jumped $1.48, or 19%, to $9.48.

Merrill Lynch balance sheet

Merrill Lynch jumped nearly 8% after coming into trade on the defensive after the brokerage said late on Monday it would write down $5.7 billion and raise $8.5 billion by selling new stock.

After the share sale, sentiment on financial stocks began to shift, with investors saying Merrill's latest write-down may be a sign that banks are nearly through purging their balance sheets of bad mortgage debt.

Crude oil for September delivery settled down $2.54, or 2.04%, at $122.19 a barrel. That was about $25 below an all-time high set earlier this month and helped stocks reverse the prior session's losses.

The stock advance and oil slide bolstered the US dollar. It traded at $1.5588 per euro at 6:01am in Tokyo, after rising 1% on Monday and touching $1.5554, the strongest level since June 25.

The dollar index, which measures the dollar's performance against a basket of six currencies, jumped to 73.428, its highest level in about a month, according to Reuters data.

Sterling fell 0.8% to $1.9791, weighed down by a report showing British retail sales fell at a record annual pace in July.

The yield on the benchmark 10-year note climbed five basis points, or 0.05 percentage point, to 4.05% at 4:25pm in New York, according to BGCantor Market Data. The 3.875% security due in May 2018 fell 13/32, or $4.06 per $1000 face amount, to 98 18/32. Two-year note yields rose seven basis points to 2.63%.

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