Wednesday 3rd September 2008
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The Dow Jones industrial average dropped 26.63 points, or 0.23%, to 11,516.92. The Standard & Poor's 500 Index dropped 5.26 points, or 0.41%, to 1,277.57. The Nasdaq Composite Index dropped 18.28 points, or 0.77%, to 2,349.24.
US crude settled down $5.75 to $109.71 a barrel, below the 200-day moving average of around $111.
As harsh a storm as Gustav was, it was far less damaging than initial fears and reports suggested that the US oil and natural gas industry will recover fast from the disruption the hurricane caused.
Energy shares in the S&P 500 dropped 4.6%, the most in a month, and extended their decline from a May record to 21%. Producers of raw-materials retreated 2.5% after gold, silver and copper also declined.
Alcoa, the world's third-largest aluminum producer, lost 5.2% to $30.46 for the biggest decline in the Dow average. Exxon, the biggest oil company, slipped 3.4% to $77.32. Chevron slipped 3.5% to $83.29.
Peabody Energy, the biggest US coal producer, fell $7.53 to $55.42. Massey Energy, the second-best performer in the S&P 500 this year, dropped $6.61 to $59.35.
Technology stocks, the second-biggest contributors to the S&P 500's decline, fell 1.4%.
Apple Inc. slumped $3.34 to $166.19 after Thomas Weisel Partners analysts cut their revenue and profit estimates for the maker of the iPod media player and iPhone and said sales might be slowing.
EBay had the steepest decline since July, losing 3.5% to $24.07. Stifel Nicolaus lowered its price forecast on shares of the internet auctioneer because of challenges from "a strengthening dollar and a weakening Western European consumer".
In a sign of more fallout from the credit crisis, Fitch Ratings cut its ratings on the preferred stock of housing finance companies Fannie and Freddie Mac on concern a lack of access to fresh capital could lead the companies to suspend dividend payments.
On the economic front, US factory activity unexpectedly shrank slightly in August according a report by the Institute for Supply Management. The report suggests the factory sector is still struggling, along with the rest of the economy, to overcome the effects of the worst US housing slump since the Great Depression of the 1930s.
The euro traded at $1.4523 at 6:05am in Tokyo, after losing 0.7% yesterday, when it touched $1.4467, the weakest since February 8. The US currency traded at 108.58 yen, following a 0.4% gain yesterday.
The pound traded at $1.7837 after touching $1.7783 yesterday, the weakest level since April 2006. The euro was at 157.68 yen, after declining 0.2%.
Copper prices in New York and London slipped and aluminum hit a seven-month low amid worries about global demand.
London Metal Exchange three-month copper - often seen as a key gauge of real economic activity - closed at $7,270 a tonne, after shedding more than $200 on Monday. In New York, copper for December delivery touched $3.1590 - the contract's lowest price point since January 28.
Aluminum - used mainly in transport, packaging and construction - closed down $10 at $2,695, after earlier falling to $2,680.5 per tonne, the lowest price since February 13.
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