Sharechat Logo

While you were sleeping: BusinessWire overnight wrap

Thursday 2nd October 2008

Text too small?
US manufacturing activity fell to the lowest level since the 2001 recession, providing evidence that the impact of the housing slump and credit crisis is spreading.

The Institute for Supply Management's factory index fell to 43.5 in September from 49.9 in the previous month. A level below 50 indicates a contraction. Other figures showed US private sector employers cut 8,000 jobs last month, according to ADP Employer Services.

Stocks on Wall Street fell after the report. The Standard & Poor's 500 Index declined 0.5% to 1160.97. The Dow Jones Industrial Average fell 0.5% to 10792.92 and the NASDAQ Composite dropped 1.2% to 2066.21.

General Electric fell 3.3% to US$24.65. The company plans to sell US$12 billion of ordinary shares and investor Warren Buffet's Berkshire Hathaway agreed to buy US$3 billion of preferred shares, helping GE boost its capital amid the credit market squeeze. IBM fell 7.3% to US$108.48.

Citigroup led financials higher, rising about 12% to US$22.96 after the US Senate agreed to vote later today on a US$700 billion rescue package. Bank of America climbed 8.8% to US$38.07 and JPMorgan Chase advanced 4.8% to US$4.82.

Senate Democratic and Republican leaders expect the rescue package to win approval today after tweaks that tie the proposal to an increase in insurance limits on bank deposits and tax breaks. The House of Representatives is likely to vote on the plan on Friday in the US.

The US dollar strengthened against the euro to $1.4045 per euro in New York from $1.4092 as overseas banks were forced to pay more for US currency held by financial institutions unwilling to lend to each other. Benchmark rates for lending between banks have jumped. Three-month dollar Libor rose to a 10-month high 4.15%.

US Treasury bonds rose after the weak manufacturing numbers and expectations the Federal Reserve will cut interest rates by 50 basis points this month to ease credit markets and lift the economy out of its slump. The yield on 10-year Treasury notes fell to 3.7% from 3.82%.

Fed funds futures on the Chicago Board of Trade indicate traders are see a 100% certainty that the Fed will cut its target ate on Oct. 29, Bloomberg reported. The probability of a 50 basis points cut rose to 42% percent from 22%, it said.

In Europe, France and Germany were at odds over creating a fund to bail out banks, with France urging the region to adopt a plan that helped lenders in smaller European states.

European stocks rose on optimism about the US rescue plan gaining approval. Barclays Plc rose 4.4% to and UBS AG gained 6.7%. The Dow Jones Stoxx 600 Index rose 0.7% to 257.75. The FTSE 100 rose 1.2% 4959.6 and the DAX 30 fell 0.4% to 5806.330.

Crude oil fell on a US Energy Department report that showed inventories gained a more-than-expected 4.28 million barrels to 294.5 million barrels. Crude oil for November delivery fell 2.1% to $98.53 a barrel on the New York Mercantile Exchange.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Greenfern Industries Limited (NZX: GFI) Releases Interim Results
Hallenstein Glasson Holdings Limited (NZX: HLG) Announcement of Final Dividend
26th November 2021 Morning Report
EROAD Limited (NZX: ERD) Accelerates Towards Next Phase of Growth
Green Cross Health Limited (NZX: GXH) REPORTS STRONG HALF YEAR PROFIT OF $9.7M
Stride Property Ltd & Stride Investment Management Ltd (NZ: SPG) Placement Size Increased Following Strong Demand
General Capital Limited (NZX: GEN) Announces Very Strong Growth
25th November 2021 Morning Report
Gentrack Group Limited (NZ: GTK) Annual Results for the Year Ended 30 September 2021
Pacific Edge Limited (NZX: PEB) Results for Six Months Ended 30 September 2021