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While you were sleeping: BusinessWire weekend wrap

Monday 21st July 2008

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A narrower loss at Citigroup, the top US bank, helped boost optimism that perhaps the outlook for the financial sector was improving, giving investors enough incentive to push Wall Street to its best week in six.

While Citigroup reported a $2.5 billion loss, concern that the banking group's capital was eased and the shares surged 7.7% to $19.35.

Citigroup boosted the Dow Jones Industrial Average to its best three-day gain since March 2003 as financial shares, the year's worst performers, jumped 21% since July 15.

The Dow Jones rose 49.91 points, or 0.44%, to 11,496.57. The Standard & Poor's 500 Index was little changed, up just 0.36 of a point, or 0.03%, at 1,260.68. The Nasdaq Composite Index shed 29.52 points, or 1.28%, to close at 2,282.78.

For the week, the Dow rose 3.5%, its best week in three months. The S&P 500 rose 1.7%, while the Nasdaq was up 1.9%.

Fannie Mae and Freddie Mac, the two largest US mortgage finance companies, extended their rebounds from 17-year lows reached on July 15.

Freddie Mac received clearance to register with the US Securities and Exchange Commission to raise $5.5 billion of capital under a plan announced in May. Fannie Mae rallied 23% to $13.40, bringing its three-day advance to 90%. Freddie climbed 10% to $9.18, capping a three-day advance of 75%.

Google, Microsoft

It was a mixed batch of results on the tech front. While shares in IBM gained after its earnings exceeded expectations, shares in both Google and Microsoft fell on Friday. All three companies reported results after the markets closed on Thursday.

Google fell $52.12, or 9.8%, to $481.32. The company posted second-quarter profit of $3.92 a share, excluding costs such as stock compensation. Analysts estimated $4.73 on average in a Bloomberg survey.

Microsoft retreated $1.66, or 6%, to $25.86. The world's biggest software maker reported 2.3% less fourth-quarter profit than analysts estimated.

The US dollar rose against major currencies after Citigroup's less-than-expected quarterly loss eased investors' grim outlook for the US financial sector.

The dollar traded at $1.5844 per euro at 2:31pm in New York, compared with $1.5863 on Thursday and $1.5938 at the end of the previous week. It dropped to an all-time low of $1.6038 on July 15. The currency climbed to 106.90 yen from 106.28 yen on Thursday. The Japanese currency traded at 169.35 per euro, from 168.58 yesterday and 169.46 on July 11.

Benchmark 10-year Treasury notes traded 26/32 lower in price on Friday for a yield of 4.10% against 3.99% late on Thursday. Ten-year yields reached to as high as 4.11%, marking the loftiest in over three weeks, and yields had their biggest weekly rise since mid-June.

Two-year notes traded 11/32 lower in price for a yield of 2.66% from 2.49%.

Oil fell to below $129 a barrel on Friday, extending a slide that has knocked nearly 13% off last week's record peak on easing tension between Iran and the West and growing demand concerns.

US crude settled down 41¢ at $128.88 a barrel in the fourth straight day of losses, while London Brent crude fell 88¢ to settle at $130.19 barrel.

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