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While you were sleeping: BusinessWire overnight wrap

Wednesday 12th November 2008

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The yen gained against the euro and the US dollar amid expectations sliding stocks will dim demand for investments funded with loans in Japan's currency.

The yen strengthened to 97.64 per dollar in New York from 124.95 the previous day. The euro fell to $1.2547 from $1.2748.

General Motors extend its slump for a fifth day on concern the largest US automaker his lurching toward bankruptcy as it burns through cash. Its shares slipped 11% to US$2.99 and has lost 87% of its value in the past 12 months.

GM led the Dow Jones Industrial Average's 2.6% decline to 8636.77. Alcoa fell 5.4% to US$11.15 after scrapping the expansion of an Australia refinery because of dwindling demand for aluminium. Boeing dropped 4.3% to US$44.37 and American Express dropped 6% to US$22.62.

The Standard & Poor's 500 Index declined 2.7% to 894.04 and the Nasdaq Composite fell 2.4% to 1576.03.

GM and US rivals Ford are awaiting government deliberations on extending financial aid to the industry. GM Chief Executive Officer Rick Wagoner told Bloomberg that the company's US sales would be "devastated" by a bankruptcy. The shares have tumbled to a 65-year low.

Barack Obama discussed the prospects of urgent support for the automakers during his meeting with President George Bush this week. Obama is seeking a second stimulus package to bolster the US economy.

Evidence has piled up across the globe that the world economy is tinkering on the brink of recession. In Japan, exports fell nearly 10% in October, service sector sentiment hit a record low and bankruptcies climbed more than 13%.

China reported slowing import growth and inflation at a 17-month low. In the UK retail sales had the biggest drop in three years and home sales fell to a 30-year low.

Crude oil fell to below US$59 a barrel in New York on speculation an ailing US economy will have lees demand for fuel. Traders are awaiting indications that the International Energy Agency will cut forecast for oil demand in 2009. It is scheduled to make an announcement Wednesday in the US

Crude oil for December delivery fell 4.8% to $59.43 a barrel on the New York Mercantile Exchange and earlier sunk as low as US$58.32.

Copper fell to a three-year low on the prospects of waning demand from the world's biggest consumers of the metal, including China. Copper futures for December delivery dropped 5.9% to US$1.648 a pound in New York and is has now slid more than 60% from its record in May.

Gold also fell, with concern there will be less demand for the precious metal in a global recession. Gold futures for December delivery fell 1.8% to US$732.80 an ounce on the New York Mercantile Exchange.

The biggest US mortgage finance companies, Fannie Mae and Freddie Mac, are stepping up efforts to reduce mortgage foreclosures, with measures including easier repayment plans for struggling home-owners. The two organisations are targeting loans where payments are at least 90 days overdue.

Stocks fell in Europe for the first time in three days, on the worsening economic outlook and falling prices for metals and oil. The Dow Jones Stoxx 600 Index dropped 4% to 212.10. BHP Billiton, the world's biggest mining company, fell more than 9%.
Germany's DAX 30 Index declined 5.3% to 4761.58 and France's CAC 40 fell 4.8% to 3336.41. In London, the FTSE 100 Index dropped 3.6% to 4246.69, paced by a 14% slide in Vedanta Resources.

According to Bloomberg estimates, earnings for the 1,246 companies in western Europe that reported results since October 7 declined 11% on average.

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