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While you were sleeping: BusinessWire overnight wrap

Wednesday 1st October 2008

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Stocks on Wall Street rebounded, led by financials, on speculation the US Treasury's rescue package will be salvaged.

The Standard & Poor's 500 Index jumped almost 5%, clawing back more than half its slump from the previous day. The Dow Jones Industrial Average climbed about 4% to 10775.71 and the NASDAQ Composite advanced 4.6% to 1157.75. Citigroup rose 17% to US$20.80, Bank of America gained 13% to US$34.07 and JPMorgan Chase rose 11.5% to US$45.70. Wachovia soared 85% to US$3.45.

Senate leaders said they will try to revive the US$700 billion rescue after the Dow had a record plunge when the US House of Representatives voted against the proposal. Senate Republican leader Mitch McConnell said lawmakers may reach accord on the plan by the end of the week, Bloomberg News reported.

The US dollar advanced against the euro and the yen amid optimism rescue can be salvaged. The dollar gained 1.8% to 105.88 yen. The euro fell 2.3% to $1.4080, the biggest one-day decline in three years.

Crude oil rebounded from its biggest slump in seven years. Crude oil for November delivery rose 4.5% to $100.68 a barrel on the New York Mercantile Exchange.

Gold and silver fell, and US Treasury bonds sank as renewed optimism in the salvage plans reduced demand for the relative safety of precious metals and government debt. Gold fell 1.8% to $878.60 on the New York Mercantile Exchange. Silver futures for December delivery dropped 5.3% to $12.34 an ounce.

The yield on two-year Treasury notes rose 33 basis points to 1.98%. The yield on the benchmark 10-year Treasuries gained 24 basis points to 3.82%.

As the fallout from the credit crisis widens, UBS AG is set to cut 1,900 jobs in investment banking, equities, and fixed income units, Bloomberg reported, citing people familiar with the plan.

European stocks also rebounded with the Dow Jones Stoxx 600 Index rising 1.8% to 256.05. Dexia SA rose 6.1% after the governments of Belgium and France provided a 6.4 billion euro bailout package for the lender. Standard Chartered Plc gained 8%. Anglo Irish Bank Corp. surged 67% after the Irish government guaranteed deposits and borrowings of six banks.

Ireland guaranteed bank deposits in a bid to improve access to international funds frozen by the global credit squeeze. The pledge covers up to 400 billion euros of liabilities and includes retail, commercial and interbank deposits.

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