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While you were sleeping: BusinessWire overnight wrap

Thursday 31st July 2008

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Wall Street advanced on Wednesday, as energy shares rallied on a rebound in the price of oil amid an unexpected drop in US inventories and a private report signaled a more robust US jobs market than was expected.

Financial shares also gained after the Federal Reserve extended an emergency lending program and the Securities and Exchange Commission prolonged a ban on a type of short sales.

The Dow Jones industrial average shot up 186.13 points, or 1.63%, to 11,583.69. The Standard & Poor's 500 Index advanced 21.06 points, or 1.67%, to 1,284.26. The Nasdaq Composite Index gained 10.10 points, or 0.44%, to 2,329.72.

The S&P 500 extended its rebound from an almost three-year low on July 15 to 5.7% as nine of 10 industry groups advanced.

The ADP Employer Services report, a precursor to Friday's government non-farm payrolls report, showed U.S. private employers added 9,000 jobs in July after job losses of 77,000 in June. Economists had forecast a drop of 60,000.

Exxon, the biggest US crude producer, advanced 4.3% to $84.38, while Chevron, the No. 2, rallied 5.3% to $87.26.

Wal-Mart, the largest retailer in the world, rose $1.11 to $58.56. Disney, the biggest theme-park operator, climbed 75 cents to $31.67.

Drug Setback

In contrast, Irish drugmaker Elan Corp's US-listed shares plunged 41.8 to $19.63 on the NYSE while US pharmaceutical company Wyeth dropped 11.9 to $39.74 after a drug trial showed the risk of a potentially serious side effect in a new Alzheimer's drug jointly developed by the companies.

Oil surged after the US Energy Information Administration said gasoline inventories fell by 3.5 million barrels compared with forecasts of a 200,000 barrel build, as US gasoline production dropped and imports fell.

US crude settled up $4.58 at $126.77 a barrel after falling to $120.42 on Tuesday, its lowest since May 6. London Brent crude rose $4.39 to settle at $127.10.

Gold futures ended 1.5% lower, erasing some early losses, as a stronger dollar and equity gains prompted selling. Gold for the most-active December contract settled down $14.10 at $912.30 an ounce in New York. The August contract for gold hit a bottom of $893.30.

Dollar Gains

The US dollar extended its recovery of the past 10 days. The New York Board of Trade's US dollar index, which tracks the dollar's performance against a basket of six currencies, rose to its highest since June 24 at 73.538, before ending the session around 73.330.

The euro slipped to $1.5567, recovering from one-month lows at $1.5521 in the wake of poor euro zone sentiment data. Against the Japanese yen, the dollar was little changed at 108.12 yen, after climbing to one-month highs at 108.33, according to Reuters data.

The US government will auction $10 billion in 30-year bonds, the most in two years, and $17 billion in 10-year notes next week.

The 30-year bond's yield rose 2 basis points, or 0.02 percentage point, to 4.65% at 4:18pm in New York, according to BGCantor Market Data. It earlier touched 4.70%, the highest since July 23. The price of the 4.375% security maturing in February 2038 fell 1/4, or $2.50 per $1,000 face amount, to 95 21/32.

The 10-year note's yield was little changed at 4.05%, and the two-year note's yield was 2.63%.

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