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While you were sleeping: BusinessWire overnight wrap

Wednesday 5th November 2008

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Stocks rallied in Europe and on Wall Street, led by financials and energy companies, on optimism credit markets are starting to thaw and as oil and metal prices gained.

The Dow Jones Industrial Average rose about 2% to 9517.68 and the Standard & Poor's 500 index gained 2.6% to 991.83. The Nasdaq Composite advanced 1.8% to 1757.98.

General Electric led percentage gainers on the Dow, rising 7.2% to US$20.69. Alcoa rose about 3% to US$12.23 and Intel gained 2% to US$15.98.

US shares also gained as the presidential election campaign drew to a close and Americans headed for the polls. A win by Democrat candidate Barack Obama may lead to increased federal government spending. The US dollar sank against the euro and strengthened against the yen.

The dollar had the biggest slide against the euro since the inception of the European currency in 1999 as the prospect of easier credit reduced demand for America's currency.

The dollar fell to $1.2953 per euro in New York from $1.2643.32 per dollar from 99.12. The yen fell 99.62 per dollar from 99.12 and earlier reached as low as 100.55.

European stocks gained for a sixth straight session, pushing the Dow Jones Stoxx 600 Index up 4.5%. The UK's Marks & Spencer rose 7.7% after posting earnings that beat expectations. Societe Generale SA and Allianz SE rose more than 11%.

Germany's DAX 30 gained 5% and France's CAC 40 advanced 4.6%. The UK's FTSE 100 Index rose 4.4%.

Crude oil surged more than US$6 a barrel as stocks rallied and the dollar fell against the euro. Oil for December delivery rose 10% to US$70.43 a barrel on the New York Mercantile Exchange.

Gold posted its biggest gain in six weeks as the dollar's weakness boosted demand for precious metals as an investment. Gold futures for December delivery rose 4.2% to US$757.30 an ounce in New York. Silver futures for December delivery rose 3.9% to US$10.13 an ounce.

The Reuters/Jefferies CRB Index of 19 raw materials surged almost 6% to the highest in two weeks.

The cost of borrowing dollars for one month in London fell to a four-year low. The London interbank offered rate, or Libor, tumbled 18 basis points to a four-year low of 2.18%. The three-month rate fell 15 basis points to 2.71%.

Governments worldwide have pledged as much as US$3 trillion in emergency funds to revive lending while central banks have slashed benchmark interest rates.

Still, Fitch Ratings said global economic growth will slow next year to 1% from an average the past five years of 3.5%, in the steepest slump since WWII.

JPMorgan Chase, the biggest US banks, plans to close its global proprietary trading desk and cut jobs in response to a potential US recession, Bloomberg reported, citing people familiar with the situation.

By Jonathan Underhill

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