Sharechat Logo

While you were sleeping: BusinessWire overnight wrap

Thursday 16th October 2008

Text too small?
Stocks on Wall Street declined after the Federal Reserve said the US economic activity weakened in September, stoking concern the world's biggest economy is lurching into recession.

US retail sales fell for a third month in September, declining 1.2%, according to Commerce Department figures. That's the first three-month slide since records began in 1992 and the biggest drop since 2005.

Federal Reserve Chairman Ben Bernanke said investors shouldn't expect an immediate recovery in the economy as a result of government efforts to restore confidence in financial markets and bolster liquidity.

"Economic activity will fall short of potential for a time," Bernanke said in a speech in New York.

The world's biggest economy has probably fallen into recession in the fourth as the housing slump curbed consumer spending.

The Standard & Poor's 500 Index rose 6.6% to 932.31 and the Dow Jones Industrial Average dropped 5.4% to 8807.46. The NASDAQ Composite fell 5.9% to 1674.2.

Citigroup led declining financial stocks, dropping 9.8% to US$16.81. American Express declined 10% to US$24.

JPMorgan Chase, the biggest US bank, fell 1.5% to US$40.01 after posting an 84% drop in third-quarter profit to US$527 million after taking almost US$6 billion of writedowns and getting a gain of NZ$581 million from the takeover of Washington Mutual.

Exxon Mobil fell 9% to US$65.78 and Chevron fell about 9% to US$62.01 after the price of crude oil fell to a 13-month low.

Alcoa tumbled 10% to US$11.67 and Walt Disney declined 7.4% to US$23.77.

The yen rose against the US dollar on the prospects of recession in the US and as slumping stocks caused investors to back out of holdings of higher-yielding assets funded with loans in Japan's currency.

The yen strengthened to 101.18 per dollar from 102.07 yesterday. The dollar rose to $1.3527 per euro from $1.3619.

The European Central Bank yesterday widened the range of assets and currencies it will accept as collateral from banks, boosting its efforts to add liquidity to credit markets. The ECB will accept debt denominated in US dollars, euros, pounds and the yen provided the securities are issued within the European Union. It lowered the acceptable debt rating to BBB- from A-.

European stocks tumbled, sending the Dow Jones Stoxx 600 Index down 6.5% to 217.17, on rising concern the region's economy is sliding into recession, sapping demand for raw materials. BHP Billiton, the world's biggest mining company, sunk 15%. Xstrata fell 20% as the price of copper extended its slide.

Germany's DAX 30 fell 6.5% to 4861.63. Deutsche Bank dropped 12% to 33.92 euros, Siemens fell 14% to 46.30 euros and Infineon declined 13% to 2.43 euros.

The UK's FTSE 100 Index fell 7.1% to 4083.04, paced by Royal Dutch Shell and Anglo American Plc, which declined 6.8% and 20% respectively. Rio Tinto dropped 17%.

Crude oil fell on prospects of waning demand for fuel as the global economy slows. OPEC cut its forecast for 2009 demand for a second straight month.

Crude for November delivery fell 3.8% to US$75.68 a barrel on the New York Mercantile Exchange and earlier fell below US$75 for the first time in this year.

Gold rose as the slump in stocks markets stoked demand for the precious metal as a haven. Gold futures for December delivery rose 1.2% to US$849.60 an ounce on the New York Mercantile Exchange.

  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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report