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While you were sleeping: BusinessWire overnight wrap

Friday 26th September 2008

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Stocks on Wall Street rose and the US dollar gained as the Congress moved closer to agreement on a $700 billion financial-rescue package for financial institutions.

JP Morgan Chase led the advance among banks, rising 7.3% to US$43.46. Bank of America rose 3.9% to US$34.37. General Electric gained 4.4% to US$25.68. Citigroup rose 2.4% to $19.41 and Morgan Stanley lifted 9.3% to $27.10.

The Standard & Poor's 500 Index rose 1.97% to 1209.18 and the Dow Jones Industrial Average advanced 1.8% to 11022.06. The NASDAQ Composite Index gained 1.4% to 2186.57.

Negotiators in the Congress have agreed in principle on the $700 billion rescue package. Lawmakers have demanded more oversight of the process and limits to executive pay, Senate Banking Committee Chairman Christopher Dodd said, according to Bloomberg News.

The package will "send a message to the markets," Dodd was quoted as saying. President George Bush yesterday warned the US economy faced the prospect of a prolonged recession without the bailout being approved.

Presidential candidates John McCain and Barack Obama returned to Washington from the campaign trail to focus on helping Democrats and Republicans to reach agreement on the plan.

US Treasury bonds fell as the prospects of a bailout dimmed the appeal of the safest securities. The yield on 10-year notes rose to 3.84% from 3.82%, while two-year yields jumped to 2.19% from 1.97%.

The two-year interest rate swap spread versus Treasury yields narrowed to 147 basis points from a record high 166 points.

The yen weakened to 106.49 per dollar from 106.11, while the dollar was little changed at $1.4609 per euro, compared with $1.4621.

Gold and silver declined on less demand for the precious metals as a haven from volatile stock markets. Gold futures for December delivery fell 1.5% to $882 an ounce on the New York Mercantile Exchange. Silver fell 1.2% to $13.275 an ounce.

Crude oil rose on speculation demand will rise if the US rescue package helps underpin the world's biggest economy. Crude oil for November delivery rose 2.2% to settle at $108.02 a barrel.

Stocks in Europe also gained, snapping three days of declines, on optimism that US lawmakers will approve a rescue plan that will help underpin financial markets and add credit liquidity.

UBS AG gained 5% amid reports is may receive an offer from HSBC Holdings Plc. The Dow Jones Stoxx 600 Index rose 2% to 271.01.

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