Sharechat Logo

While you were sleeping: BusinessWire overnight wrap

Friday 31st October 2008

Text too small?
While you were sleeping: BusinessWire overnight wrap

The US economy shrank a smaller-than-expected 0.3% in the third quarter, helping stocks on Wall Street rise and nudging Treasury bonds lower.

The world's biggest economy had the worst contraction in seven years as consumer spending dropped and companies curbed investment. US gross domestic product probably extended its slump into a recession this quarter, economists say.

A weak US economy may help Democrat presidential candidate Barack Obama in his battle against Republican John McCain in next week's poll. Obama's 30-minute infomercial topped US network prime time ratings, drawing more than 24 million viewers across three major networks

The GDP figures came after the Federal Reserve slashed its target rate to 1% and some investors are betting further interest rate reductions around the globe will help soften the global economic slump. US GDP was forecast to shrink 0.5%.

American Express announced plans to cut 7,000 jobs and scale back investments as funding costs and bad loans rise. Motorola said fourth-quarter earnings would miss estimates and the company expects to cut 3,000 jobs. A merger between General Motors and Chrysler may result in 74,000 job losses, Bloomberg reported, citing Grant Thornton.

The Dow Jones Industrial Average rose 2.1% to 9180.69 and the Standard & Poor's 500 Index advanced 2.6% to 954.09. The Nasdaq Composite rose 2.5% to 1698.52. Intel, Hewlett-Packard and Chevron led gainers. General Motors and Johnson & Johnson were among declining stocks.

Colgate-Palmolive rose as much as 9.2% after posting better-than-expected earnings.

Sales of commercial paper in the US jumped by a record amount after the Federal Reserve stepped in to buy the debt to help revive the market. Total outstanding US commercial paper rose 6.9% to US$1.55 trillion, seasonally adjusted, in the week ended October 29, according to Fed figures. General Electric and American Express were among companies that sold commercial paper.

In Europe, stocks rose for a third day as central bank rate cuts, including the Fed and Hong Kong's. BHP Billiton gained 5%, adding to gains on the ASX yesterday. Alcatel-Lucent surged 20% after posting better-than-expected earnings.

The Dow Jones Stoxx 600 Index rose 1.2% to 216.24. Germany's DAX 30 rose 1.3%, paced by a 23% gain for Commerzbank and an 18% advance for Deutsche Bank. France's CAC 40 rose 0.2% and the FTSE 100 Index advanced 1.2%.

Crude oil fell on concern a shrinking US economy will reduce demand for fuel. UBS AG cut its forecast for oil prices for next year by 43% to $60 a barrel, because of the prospects of a global slowdown, Bloomberg reported.

Crude for December delivery fell 2.3% to US$65.96 a barrel on the New York Mercantile Exchange.

Gold fell the most in a week as the dollar advanced, reducing demand for the precious metal as an alternative. Gold futures for December delivery fell 2.1% to US$738.50 an ounce in New York.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report