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While you were sleeping: BusinessWire overnight wrap

Wednesday 24th September 2008

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Stocks on Wall Street extended their decline for a second day as US Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged the Congress to approve a $700 billion rescue plan for financial institutions.

The Standard & Poor's 500 Index declined 1.6% to 1188.22, rounding out the worst two-day decline in six years. The Dow Jones Industrial Average fell 1.5% to 10854.15 and the NASDAQ dropped 1.2% to 2153.33.

General Motors paced decliners, falling 7.4% to US$10.72. General Electric fell 4.6% to US$24.95 after Merrill Lynch lowered its rating on the stock. Alcoa slid 4.6% to US$25.59 and Verizon Communications fell 3.1% to US$31.05.

Crude oil fell amid doubts the rescue plan will revive economic growth and demand for fuel. Crude oil for November delivery fell 2.5% to US$106.61 a barrel on the New York Mercantile Exchange after yesterday initially soaring.

Congressional leaders for the democrats and Republicans are making heavy work of garnering support for the bailout as lawmakers push for extra conditions, including a cap on executive payouts.

Spencer Bachus, a Republican on the House Financial Services Committee, said he is "very uneasy" with the idea of spending up to a trillion dollars of taxpayers money to buy toxic securities from financial institutions.

US Treasuries gained as some investors bet the US economy won't revive quickly, stoking demand for the safest securities. Two-year yields fell nine basis points to 2.08%. Ten-year yields fell three basis points to 3.82%.

The dollar rose against the euro though eased against the yen. The dollar gained to $1.4645 per euro from $1.4774 the previous day. It weakened to 105.49 yen from 105.51.

European shares fell for a second day as the US Congress pondered details of the US$700 billion financial bailout plan. The FTSEurofirst 300 Index declined 1.5% to 1,109.93 points. UBS dropped 7.9%, Royal Bank of Scotland declined 5.9%, while miner Anglo American fell 8.2% and Rio Tinto dropped 5.1%.

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