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While you were sleeping: BusinessWire overnight wrap

Tuesday 14th October 2008

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Stocks on Wall Street rallied, sending the Standard & Poor’s 500 Index to its biggest gain since 1987. Morgan Stanley soared 85% after Mitsubishi UFJ Financial Group acquired a 21% stake.

European stocks gained after the region moved to guarantee its banks. UBS AG jumped more than 12%. The euro gained against the US dollar and the yen amid optimism Europe’s efforts to shore up its financial markets will limit bank failures.

The S&P 500 rose 8.9% to 978.83, the Dow Jones Industrial Average climbed 8.8% to 9188.33 and the NASDAQ Composite advanced 9.2% to 1800.89.

Morgan Stanley rose to US$17.76 after reaching an agreement to give Mitsubishi UFJ preferred stock that comes with a 10% dividend, rather than ordinary shares. Morgan Stanley plummeted last week on concern the deal would fail. Prudential Financial gained 38% to US$49.74. Goldman Sachs rose 27% to US$113 and Citigroup rose 13% to US$15.94. American Express gained 17% to US$27.14.

General Motors climbed 29% to US$6.31 and Microsoft rose 14% to US$24.48.

Alcoa rose 19% to US$13.43 as prices for metals rallied. Aluminum rose 2% to US$2,260 a ton. Copper for delivery in three months rose as much as 7.5% to US$5,150 a metric ton.

Crude oil rose on optimism efforts by the US and European governments will ease the financial crisis, ensuring demand for fuel doesn’t slump and helping lift shares of oil producers.

Oil for November delivery rose 4.5% to US$81.19 a barrel on the New York Mercantile Exchange. Exxon Mobil, the world’s biggest oil company, advanced 7.4% to US$65.75.

The cost to borrow dollars in Europe fell as government stepped up efforts to restore confidence to the financial system.

The London interbank offered rate, or Libor, for three-month dollar loans dropped 7 basis points to 4.755.

The Federal Reserve backed efforts by European central banks to flood financial markets with dollars to bolster liquidity. The European Central Bank, Bank of England and Swiss National Bank will offer the region’s lenders unlimited funds.

European nations including Germany, France and Spain pledged as much as 1.3 trillion euros to shore up the banking system. Meanwhile, the UK took controlling stakes in Royal Bank of Scotland Group Plc and HBOS Plc.

Bank of Scotland fell 8.4% to 65.7 pence and HBOS tumbled 28% to 90 pence after the deal with the government. The UK government gains rights to install directors, set dividends and determine the pay of executives.

The FTSE 100 advanced 8.3% to 4256.9 as Schroders Plc jumped 32% TO 730.85 pence, Standard Life gained 21% to 222.25 pence and Standard Chartered climbed 20% to 1057.49 pence. Rio Tinto rose 15% to 2682.46 pence as metal prices rose.

Germany’s DAX 30 gained 11% to 5062.45, led by a 40% surge in Hypo Real Estate.

European government bonds fell as stocks rallied and confidence rose, easing demand for safer securities. The yield on the 10-year German bund rose 10 basis points to 4.09%.

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