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While you were sleeping: BusinessWire weekend wrap

Monday 20th October 2008

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US stocks ended a volatile week mixed on Friday in New York, with the Dow Jones Industrial Average falling 1.4%. Citigroup led financials lower, while consumer-related companies Kraft Foods and Home Depot advanced.

The Dow fell to 8852.22 and the Standard & Poor's 500 Index fell 0.6% to 940.55 and the NASDAQ Composite declined 0.4% to 1711.29.

South Korea yesterday pledged US$130 billion in guarantees and in funding as it joined global efforts to save banks and restore confidence to credit markets.

US president George Bush, French President Nicolas Sarkozy and the European Commission's Jose Barroso proposed a series of leaders summits to develop a coordinated response to the financial crisis. The three leaders were meeting at the US Camp David presidential retreat.

European Central Bank President Jean-Claude Trichet told a French radio station that the banking system is "on the path to normalization" as concerted efforts to ease credit conditions and help underpin banks.

ING Groep, the biggest Dutch financial-services company, will report its first quarterly loss, 500 million euros, after writing down its investments by 1.6 billion euros. The Netherlands will provide 10 billion euros to help support the bank, about half of the amount the government made available to help financial firms.

Standard & Poor's put the counterparty ratings of Switzerland's UBS AG on watch for a possible downgrade because of the outlook for dwindling earnings.

European shares rose on Friday, lifted by energy companies as the price of crude oil gained, BP and Royal Dutch Shell both rose about 9%.

Crude oil rose from the lowest in a year on Friday on speculation OPEC may announce cuts to production this week as demand ebbs and stockpiles rise.

OPEC President Chakib Khelil was reported as calling for a "significant" reduction in output by the cartel to balance supply and demand. OPEC is scheduled to have an emergency meeting on October 24.

Crude oil for November delivery rose as much as 4.5% to $73.02 a barrel on the New York Mercantile Exchange.

Gold declined 2.1% in New York as signs inflation is abating in the US reduced demand for the precious metal as a hedge against rising prices. Gold futures for December delivery fell 2.1% to $787.70 an ounce.

Copper rose on the prospects of strikes in Peru by workers at Freeport-McMoran Copper & Gold and on speculation demand for the metal will pick up after prices slumped this year. Copper futures for December delivery gained 4.5% to US$2.1795 a pound on Friday in New York.

The US government's measures to add liquidity to credit markets will push down the London interbank offered rates, or Libor by about 2 percentage points Pacific Investment Management Co.'s Bill Gross said in a Bloomberg interview

Gross said one-month dollar Libor will drop to about 2.25% and three-months will fall to 2.65%, according to the report.

European government bonds rose for the fourth straight week on the prospects of a recession in the region, which would drive down interest rates. The yield on the German bund fell to 3.97%.

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