Monday 13th October 2008
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"None of our countries acting alone could end this crisis," French President Nicolas Sarkozy, who chaired the European leaders meeting, said at a media conference in Paris.
The pressing need to step up efforts was echoed by Group of 20 nation finance officials. After the G-7 meeting in Washington, US Treasury Secretary Henry Paulson told a media conference that the US would acquire equity in banks under a rescue program that would encourage the firms to raise private capital at the same time.
Shares fell on Wall Street on Friday. The Dow Jones Industrial Average dropped 1.5% to 8451.19. Alcoa, Chevron and Exxon Mobil led the decline, all dropping more than 8%. Boeing slipped 5.9% to US$41.80.
The Standard & Poor's 500 Index fell 1.2% to 899.22, rounding out its worst week in 75 years. Morgan Stanley fell 22% to US$9.68 and CBS fell 20% to US$8.10.
General Motors gained 2.7% to US$4.89. On Saturday, the biggest US automaker said it hadn't sought government assistance though it would not rule out seeking federal aid. Ford Motor Co. fell 4.3% to US$1.99. Bloomberg News reported that Ford is considering selling its controlling stake in Mazda.
US Treasuries declined as some investors anticipated the market will have an ample supply of debt as the US government sells more bonds to bail out financial firms.
The yield on 10-year Treasury notes rose 10 basis points to 3.88%. Two-year notes yielded 1.6%, up from 1.53%.
The yen strengthened to a 10-year high against the dollar as investors backed out of carry trades funded with loans in Japan's currency amid the global stocks rout.
The yen gained to 99.03 per dollar and traded as strong as 97.92. The euro traded as low as $1.3259, the lowest in 18 months.
In Europe, Germany's the DAX 30 fell 7% to 4544.31 on Friday, with Deutsche Bank dropping 16% to 31.23 euros. The FTSE 100 tumbled 8.9% to 3932.06. Schroders sank 29% to 619.59 pence and Royal Bank of Scotland declined 25% to 71.7 pence.
The Dow Jones Stoxx 600 Index rounded out its worst week on record, led by declines by Anglo-Irish Bank and ArcelorMittal.
In the latest national offer to lift liquidity in financial markets, Norway's government offered up to US$55 billion in government bonds in exchange for mortgage debt.
Russia's Finance Minister Alexei Kudrin said in Washington that the IMF's estimate for 5.5% economic growth in the energy-producing nation next year may be optimistic.
Crude oil fell to its lowest level in a year amid prospects of a global recession, which would dent demand for fuel. Crude oil for November delivery fell 10% to US$77.70 a barrel on the New York Mercantile Exchange on Friday, heading down to almost half its record level of US$147.27 a barrel reached in July.
Gold and silver fell, pacing a slide in commodity prices. Gold futures for December delivery fell 3.1% to $859 on the New York Mercantile Exchange. Silver futures for December delivery dropped $1.27 to $10.60 an ounce.
Copper tumbled 11% on Friday, bringing its decline last week to 20% on mounting concern about a global slowdown. Copper futures for December delivery fell 26.15 cents to US$2.1445 a pound on the New York Mercantile Exchange.
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