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While you were sleeping: BusinessWire overnight wrap

Tuesday 7th October 2008

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Stocks tumbled on Wall Street, extending a global rout, as bank bailouts in Europe highlighted the widening impact of a credit market freeze. The yen soared as investors eschewed riskier investments.

The Standard & Poor's 500 Index fell 3.6% to 1060.05. The Dow Jones Industrial Average fell 3.3% to 9983.38 and the NASDAQ Composite dropped 4.1% to 1868.17.

Boeing tumbled 7.7% to US$49.71, Bank of America fell 7.8% to US$31.78 and JPMorgan Chase slipped 7.2% to US$42.59. Walt Disney fell 6.8% to US$27.54, Alcoa dropped 6.8% to US$17.93 and General Motors fell 6.7% to US$8.4. Microsoft slid 6.3% to US$24.65.

The sell-off slashed about $2.5 trillion from the value of global equities, according to a Bloomberg estimate.

The slump spread far and wide. The MSCI Emerging Markets Index tumbled 11%, the biggest one-day decline since 1987. Russia's Micex Index fell 19%, with trading halted three times yesterday.

Hypo Real Estate fell 37% to 4.70 euros, leading a 7.6% drop in the Stoxx 600 after the German government led a group including banks and insurers in a 50 billion euro rescue of the nation's No. 2 lender. Germany and Denmark pledged to guarantee their nation's bank deposits while BNP Paribas SA agreed to buy Fortis's units for 14.5 billion euros.

UK stocks slumped, sending the FTSE 100 Index down 7.9% to 4,589.19, paced by HBOS Plc.

The US dollar rose to a 13-month high versus the euro as Europe scrambled to shore up its lenders. The yen strengthened against most major currencies as investors unwound trades funded by loans in Japan's currency.

The euro dropped to $1.3525 from $1.3772 and weakened to 137.22 yen from 145.11. The dollar fell to 101.81 yen, from 105.32, after recording its biggest drop in a decade.

Meantime, Treasury Secretary Henry Paulson was in talks with Federal Reserve Chairman Ben S. Bernanke to speed the establishment of the US$700 billion rescue package approved by the Congress last week.

Crude oil fell to as low as US$87.56 a barrel in New York amid speculation a global economic slowdown will erode demand for fuel. Crude oil for November delivery fell 6.5% to $87.81 a barrel on the New York Mercantile Exchange.

Gold rose and US Treasuries rallied as investors sought a haven from the global rout. Gold futures for December delivery rose 4% to US$866.20 an ounce. Other metals and raw materials tumbled on expectations demand will wane. The Reuters/Jefferies CRB Index of 19 raw materials fell as much as 4.8%.

Copper futures for December delivery fell about 7.3% to $2.493 a pound, the biggest drop in almost two years.

The yield on US two-year Treasuries fell 18 basis points to 1.40%, extending a global rally in government bonds. German two-year yields fell 22 basis points to 3.06%.

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