Friday 24th October 2008
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The yen strengthened to as much as 123.42 per euro from 125.60 and gained to as much as 96.46 per dollar from 97.66.
Goldman Sachs Group announced it will cut 3,200 workers, amounting to 10% of its workforce, because of the deteriorating outlook for revenue, Bloomberg and Reuters reported, citing people familiar with the plan. Some 130,000 jobs have been shed from the finance industrial since mid-2007, it said.
American International Group chief executive Edward Liddy reportedly said the insurer may need more than the US$123 billion bailout offered by the U.S. government if credit markets stay frozen. "It's possible it may not be enough," Liddy told PBS's NewsHour show.
Alan Greenspan, former Federal Reserve chairman, called the financial crisis a "once-in-a-century credit tsunami" that had showed up a flaw in his free-market ideology, because regulation was now needed to underpin markets.
US stocks staged a late rally as a rebound in the price of crude oil helped lift Exxon Mobil and Chevron. Boeing, AT&T and Merck advanced.
The Dow Jones Industrial Average rose 172.04, or 2.1%, to 8691.25. The Standard & Poor's 500 Index gained 1.3% to 908.11, while the Nasdaq Composite slipped 0.7% to 1603.91. Hewlett-Packard declined about 6%.
Crude oil rose from a 16-month low after OPEC President Chakib Khelil said members of the cartel reached agreement on the need to reduce production, though not the size of the cut.
Crude oil for December delivery rose 1.6% to US$67.84 a barrel on the New York Mercantile Exchange.
Gold fell below US$700 an ounce as investors sold the precious metal to hold cash. Gold futures for December delivery fell 2.8% to US$714.70 an ounce on the New York Mercantile Exchange.
Copper, seen as an indicator for economic growth, fell to a three-year low on the prospects of a global economic slump.
Copper futures fell 2.8% to US$4,040 a ton on the London Metal Exchange and earlier sank to US$3,815.
The Reuters/Jefferies CRB Index fell to the lowest level since early 2004.
In Brazil, the central bank said it will sell $50 billion of currency swaps to help support its currency, after the real tumbled. The real jumped almost 4% after the announcement.
Venezuela's currency fell to a 10-month low in the parallel, unregulated market on speculation the government may be ready to devalue the bolivar. In Argentina, opposition lawmakers are attempting to thwart the government's plans to use $29 billion of nationalized retirement funds to repay debt, a move that was seen as a sign the country may be heading for default.
European stocks dropped for the third day, sending the Dow Jones Stoxx 600 index down 0.4% to 208.68. Germany's DAX 30 declined 1.1% to 4519.7 after Daimler AG cut its forecast. BHP Billiton, Rio Tinto and other miners fell as the price of copper sank.
In the UK, the FTSE 100 Index rose 1.2% to 4087.83, the first gain in three days, as a rebound in the price of crude oil lifted shares of Royal Dutch Shell and BP Plc. Consumer stocks including Unilever gained after Nestle raised its forecast for sales.
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