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While you were sleeping: BusinessWire weekend wrap

Monday 25th August 2008

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Optimism that Lehman Brothers might have found a suitor and another plunge in the price of crude oil bolstered Wall Street investors, and helped US stocks end last week on a positive note.

Lehman added 69¢ to $14.41 after surging as much as 16% after Korea Development Bank said it was considering investments including Lehman. The investment bank has been battered by mounting losses sparked by the US housing slump.

The Dow Jones industrial average shot up 197.85 points, or 1.73%, to 11,628.06. The Standard & Poor's 500 Index rose 14.48 points, or 1.13%, to 1,292.20. The Nasdaq Composite Index climbed 34.33 points, or 1.44%, to 2,414.71.

For the week, the Dow finished down O.3% while the S&P slipped 0.5% and the Nasdaq fell 1.5%.

Taking the lead on the Lehman speculation, investors pushed stocks higher on comments made by Warren Buffett in a television interview that he had no bets against the dollar and that stocks were more attractive now than a year ago.

Federal Reserve chairman Ben Bernanke added to the upward momentum, saying at a conference that falling oil prices and a stronger US dollar should curb inflation, supporting the US central bank's low interest-rate strategy.

Citigroup added 67¢ to US$18.14, Bank of America rose US$1.17 to US$30.21 and JPMorgan increased US$1.41 to US$37.67. The S&P 500 Financials Index jumped 3.1%, the most since August 8.

As for oil, US crude fell US$6.59, or 5.4%, to settle at US$114.59 per barrel on Friday. That was the biggest decline in percentage terms since December 27, 2004, and effectively reversed Thursday's gain of a similar size.

The drop in oil prices renewed interest in battered down airline stocks as well as automakers and retailers.

UAL added US$1.39 to US$12.72 today, US Airways Group increased US$1.06 to US$7.86 and Continental Airlines climbed US$1.52 to US$15.86. General Motors, the largest US automaker, gained 52¢ to US$10.44.

Wal-Mart Stores, the world's biggest retailer, rose 1.6% to US$59.44.

On Nasdaq, Apple Inc, the maker of the iPod and the iPhone, advanced 1.4% to US$176.79.

US Dollar

Against the euro, the US dollar climbed 0.8% to US$1.4781 at 4:35 pm in New York on Friday, from US$1.4899 on Thursday. The dollar rose 1.5% to 110.07 yen, from 108.43. It touched 108.14 on Thursday, the lowest since August 5. The yen fell 0.7% to 162.69 per euro, from 161.57.

Sterling fell 1% to US$1.8588 on Friday and dropped 0.7% to 79.84 pence per euro after a report showed British economic growth stagnated in the second quarter.

Benchmark 10-year Treasuries traded 11/32 lower in price for a yield of 3.87%, up from 3.83% late on Thursday. Benchmark yields reached as high as 3.90% on Friday, their loftiest in a week.

Gold lost a bit more of its lustre on Friday, declining to US$827 by New York's last quote at 2:15 p.m. EDT on Friday. Silver fell to US$13.33/13.37 an ounce and spot platinum dropped to US$1,428.50/1,448.50 an ounce.

Copper was forecast to extend its advance. Copper for delivery in three months on the London Metal Exchange advanced 6.7% last week.

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