Sharechat Logo

While you were sleeping: BusinessWire overnight wrap

Tuesday 2nd December 2008

Text too small?
Stocks on Wall Street tumbled after Federal Reserve Chairman Ben Bernanke said the world's biggest economy will probably stay weak and he has limited scope to cut interest rates further.

"Although further reductions from the current federal funds rate target of 1% are certainly feasible, at this point the scope for using conventional interest-rate policies to support the economy is obviously limited," Bernanke said in a speech to the Austin Chamber of Commerce.

The Standard & Poor's 500 Index fell 6% to 841.69 and the Dow Jones Industrial Average declined about 5% to 8388.83. The Nasdaq Composite fell 6% to 1442.85. Citigroup tumbled 17% to US$6.89 and General Motors dropped 13% to US$4.55. American Express fell 13% to US$20.36 and JPMorgan Chase & Co. declined 11% to US$28.17 after an analyst at Oppenheimer & Co. said credit card companies will probably cut lending.

Ford Motor Co. fell 12% to US$2.36 after saying it is considering options including the sale of its Volvo luxury brand to raise cash to shore up its finances.

General Electric fell more than 6% after a report showed manufacturing shrank at the fastest pace in 26 years.

US manufacturing slumped in November, with the Institute for Supply Management's factory index sliding to a lower-than-expected 36.2. Measurements of factory output in China, Europe and the UK all tumbled.

Signs of the global manufacturing slump drove down the price of copper, extending its five-month slide.

Copper futures for March delivery fell 1.1% to US$1.631 a pound on the New York Mercantile Exchange.

The price of gold had its biggest drop in eight months on expectations the global economic slump will erode demand for the metal. Gold futures for February delivery fell 5.2% to US$776.80 an ounce in New York.

In the latest sign of corporate grief, Pilgrim's Pride Corp., the biggest US producer of chickens, sought bankruptcy protection after posting four quarters of losses.

US Treasuries advanced, pushing yields to record lows, after Bernanke said the Federal Reserve may buy the government debt and target long-term interest rates to arrest the US economy's slump.

The yield on 10-year Treasuries fell 25 basis points to 2.67 percent in New York. That's the lowest yield since the Fed began keeping daily record in 1962, according to Bloomberg. The 30-year bond yield dropped 21 basis points to 3.22%.

Crude oil fell below $50 a barrel after the Organization of Petroleum Exporting Countries put off a decision to reduce production until the cartel meets again on December 17.

OPEC wants to use the extra time to assess the impact of its 1.5 million-barrel-a-day output cut agreed to in October. Crude oil for January delivery fell 8.6% to US$49.73 a barrel on the New York Mercantile Exchange.

The yen strengthened against the US dollar and the euro as declining stocks and evidence of a slump in manufacturing prompted some investors to exit high-yielding assets funded with loans in Japan's currency.

The yen rose to 93.36 per dollar in New York, from 95.52 on Friday. Japan's currency rose to 118.07 per euro from 121.22. The dollar gained to $1.2651 per euro from $1.2691.

European stocks fell, snapping a five-day rally in the Dow Jones Stoxx 600 Index, after reports showed weaker manufacturing in the euro zone and China. ArcelorMittal, the world's largest steelmaker, tumbled 12%. Royal Dutch Shell Plc and BP Plc declined more than 5% after as crude oil fell below US%50 a barrel.

The Stoxx 600 fell 6% to 193.91. Germany's DAX 30 Index slipped 5.9% to 4394.79 and France's CAC 40 fell 5.6% to 3080.43. In London, the FTSE 100 Index fell 5.2% to 4065.49.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

FreshLeaf: Cannabis on course to be 'medicine of the masses'
Arvida Group Limited (NZX: ARV) to Acquire Arena Living Retirement Living Portfolio
My Food Bag Group Limited (NZX: MFB) Market Update and HY Results Announcement Date
Harmoney Corp Limited (NZX: HMY) Delivers Record September Quarter
Vital Healthcare Property Trust (NZX: VHP) Announces Successful Completion of $115m Placement
14th October 2021 Morning Report
General Capital Limited (NZX: GEN) Completes Greenfern Listing
13th October 2021 Morning Report
Hotel Montreal: Patterson Family Buys Christchurch's Hotel Montreal