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While you were sleeping: BusinessWire overnight wrap

Thursday 9th October 2008

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Shares on Wall Street rose for the first time in six days after the Federal Reserve and the European Central Bank led a coordinated reduction in interest rates to tackle the financial crisis.

US Treasury Secretary Henry Paulson said regulators will use all their authority "to promote the process of repair and recovery and to contain risks to the financial system."

The Fed, ECB, Bank of England, Bank of Canada and Sweden's Riksbank each cut their benchmark rates by half a percentage point. The coordinated central bank rate cuts saw the spread narrow between US Treasury yields and interest-rate swaps, a sign that the credit freeze could begin to thaw. The two-year swap spread fell to 133 basis points from almost 170 basis points at the start of the month.

The Standard & Poor's 500 Index gained 1.7% to 1,013.48 in New York. The Dow Jones Industrial Average added 1.1% to 9,551.69. The NASDAQ Composite gained 2.3% to 1,795.14.

JPMorgan Chase, the largest US bank, rose 8.6% to US$42.68, Citigroup climbed 5.5% to US$15.99 and General Electric advanced 7% to US$21.72. Hewlett-Packard rose 5.3% to $41.79.

Other tech stocks also rallied. Qualcomm, whuich makes chips for mobile phones, rose 8.4% to US$42.47. Apple rose 6.3% to US$94.81.

US government bonds fell after the Treasury sold US$66 billion in debt to ease a shortage of government debt. The yield on two-year notes rose 14 basis points to 1.62%. Ten-year yields rose 18 basis points to 3.68%.

Crude oil fell to a 10-month low after US figures showed a build up in inventories and investors bet demand will wane as global growth slows. Oil supplies rose 8.12 million barrels to 302.6 million barrels in the week ended October 3, according to the US Energy Department said today.

Crude oil for November delivery fell 1.2% to $88.95 a barrel on the New York Mercantile Exchange.

Copper fell to its lowest level in two and a half years on concern global demand will abate. Copper futures for December delivery fell 7% to US$2.36 a pound on the New York Mercantile Exchange. The Reuters/Jefferies CRB Index of 19 raw commodities fell more than 1%.

The US dollar fell against the euro after the central bank rate cuts, which ease demand for the American currency. The dollar dropped to $1.3698 per euro from $1.3588. It weakened to 100.13 yen from 101.47 and briefly dipped to 98.61.

In Europe, the Dow Jones Stoxx 600 Index declined on concern central banks and government won't manage to avert a worldwide recession. BHP Billiton, the world's biggest mining company, fell 11% and BP Plc shed 6.8%, Barclays Plc fell 2.4%.

UK stocks dropped even after the Bank of England cut interest rates and offered 50 billion pounds of funds to the country's banks. The FTSE 100 index lost 5.2% 4,366.69, a four-year low.

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