Sharechat Logo

While you were sleeping: BusinessWire overnight wrap

Friday 7th November 2008

Text too small?
Stocks tumbled on Wall Street, with three of the benchmark U.S. indexes declining more than 3%, following a slide in European shares amid widening concern the global economic slump will erode corporate earnings.

The Bank of England slashed its key rate by 1.5 percentage points to 3%, the lowest level since 1955, and the European Central Bank reduced its rate 50 basis points to 3.25%. Switzerland also cut rates.

The rate reductions across Europe weren't enough to reassure investors in the region's equity markets. The Dow Jones Stoxx 600 Index fell 5.6%. Adidas AG and Axa SA both fell more than 9% after posting lower than expected results. Germany's DAX 30 fell 6.8% to 4813.57, led by Deutsche Bank and ThyssenKrupp; France's CAC 40 declined 6.4% after ArcelorMittal tumbled 19% and Alcatel-Lucent slumped 14%.

The U.K.'s FTSE 100 Index dropped 5.7%, with Man Group sliding 31%, Vedanta Resource falling 21% and Invensys dropping 18%. Commodity producers BHP Billiton and Rio Tinto both slid about 15%.

"There has been a very marked deterioration in the outlook for economic activity at home and abroad," the Bank of England said in a statement.

ECB President Jean-Claude Trichet told a press conference in Frankfurt that "I don't exclude that we will decrease rates again'' because financial turmoil will weigh on the global economy "for a rather protracted period."

The International Monetary Fund said the U.S., Japan and euro region may fall into recession, the first such simultaneous contraction since WWII.

"Markets have entered a vicious cycle of asset de- leveraging, price declines and investor redemptions," the IMF said in its World Economic Outlook report. The IMF urged governments and central banks to do more to "help limit the decline in world growth."

In the U.S., the number of people getting unemployment benefits rose to the highest since 1983, according to government figures.

The Dow Jones Industrial Average dropped 4.8% to 8705.27. General Motors slid 11% after Toyota Motor halved its forecast for operating profit and U.S. automakers sought a meeting with the U.S. House speaker. GM and Ford may post deep third-quarter losses, analysts say.

Alcoa fell 9% and Exxon Mobil fell 4.5% after the price of oil fell. American Express tumbled 10%, Citigroup fell 7.4% to and Intel fell 6.5%.

The Standard & Poor's 500 index dropped 4.8% to 907.13 and the Nasdaq Composite declined 3.8% to 1617.72.

Crude oil fell to a 19-month low on the prospects of waning demand for fuel as global economic growth dwindles. Crude oil for December delivery fell 7% to US$60.71 a barrel on the New York Mercantile Exchange.

Gold futures for December delivery fell 1.4% to US$732.20 an ounce in New York. Copper fell as inventories rose, a sign that demand for the metal is slowing. Copper futures for December delivery fell 2.1% to US$1.781 a pound on the New York Mercantile Exchange.

The euro fell against the dollar and yen after the ECB cut rates and Trichet said the region "weakened significantly."

The euro declined to $1.2743 in New York from $1.2954 and dropped to 124.58 yen. The U.S. dollar weakened to 97.73 yen.

U.S. Treasury bonds fell ahead of the government's auction of US$55 billion of debt next week. The yield on the 30-year bond rose 3 basis points to 4.2%. Shorter-dated bonds were little changed.

By Jonathan Underhill



  General Finance Advertising    

Comments from our readers

No comments yet

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

Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report
Greenfern Industries Limited (NZX: GFI) L&Q Notice
TruScreen Group Limited (NZX: TRU) Clinical Trial Results Highlight Efficacy of TRU Technology
20th October 2021 Morning Report
Freightways Limited (NZX: FRE) Acquisition of ProducePronto
19th October 2021 Morning Report
PGG Wrightson Limited (NZX: PGW) Guidance Update
Vital Limited (NZX: VTL) Provides Update on PSN LMR
18th October 2021 Morning Report