While you were sleeping: US dollar gains, Wall St weakens

Tuesday 7th April 2009

The US dollar strengthened against most major currencies, reaching a five-month high against the yen, as weakening equities spurred demand for the world's reserve currency as a haven.

Banks led Wall Street lower. Citigroup fell 4.6% to US$2.72 and JPMorgan Chase declined 3.7% to US$28.20 after Calyon Securities analyst Mike Mayo put an 'underperform' or 'sell' rating on most major banks, saying strike in the sector was likely to endure.

Mayo predicted loan losses at banks would exceed levels seen in the Great Depression.

Treasury Secretary Timothy Geithner said he is prepared to force out directors and executives of banks, using the same leverage as was used to toppled General Motors' Rick Wagoner, if the government is dissatisfied with their performance whilwe receiving federal aid.

"Where that requires a change in management and the board, then we will do that," Geithner told the CBS "Face the Nation" programme.

The Dow Jones Industrial Average fell 0.5% to 7975.85 and the Standard & Poor's 500 fell 0.8% to 835.48. The Nasdaq Composite dropped 0.9% to 1606.71.

Sun Microsystems fell 23% to US$6.58 amid speculation merger talks with IBM have collapsed. IBM slipped 0.7% to US$101.56.

Aluminium producer Alcoa fell 3.2% to US$7.91 as prices of metals fell.

Copper declined from its highest level in five months amid concern demand for the metal used to make pipes and wires will be curbed by the weak global economy.

Copper futures for May delivery fell 2.1% to US$1.959 a pound on the New York Mercantile Exchange.

The Conference Board's Employment Trends Index slipped 2.3% to 90.1 in March, the lowest level since February 1994 and is down 22% from March 2008. The index is a measure of job prospects in the US economy.

Crude oil fell for a second day as stocks declined and Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said OPEC production cuts probably won't rebound be enough to drive a rebound in crude as far as US$70 a barrel this year.

Crude oil for May delivery eased back by US$$1.46 to US$51.05 a barrel on the New York Mercantile Exchange. The price of oil has gained 14% so far this year.

Gold futures for June delivery fell 2.7% to US$872.80 an ounce in New York as the strengthening US dollar sapped demand for the precious metal as a haven.

Stocks in Europe fell as European Union figures showed producer prices fell a larger-than-expected 1.8% in February while a separate report showed retail sales had a record 4% drop from a year earlier.

The Dow Jones Stoxx 600 Index declined 0.6% to 185.01, led by an 11% slide for Rio Tinto as prices of commodities fell. The Reuters Jefferies CRB Futures Price Index fell 1.1% overnight.

In London, the FTSE 100 declined 0.9% to 766.09. Germany's DAX 30 slipped 0.8% to 4349.81 and in France, the CAC 4o fell about 1% to 2929.75.

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