Sharechat Logo

While you were sleeping: BusinessWire weekend wrap

Monday 6th October 2008

Text too small?
Banks in Europe withdrew support for a 35 billion euro bailout of Germany's No. 2 lender Hypo Real Estate Holding AG in a package that was backed by the European Central Bank and the Bundesbank.

Die Welt newspaper reported that Hypo Real Estate needs more funds than the amount in the rescue - some 50 billion euros by the end of next week. Belgian's government, meantime, is seeking to ensure Fortis's 11 billion-euro rescue package enables it to survive.

Stocks on Wall Street extended their declines on Friday in New York. The Standard & Poor's 500 Index fell 1.4% to 1099.23. Citigroup tumbled 18% to US$18.35 after Wells Fargo trumped its offer to buy Wachovia's banking assets for US$2.16 billion by offering US$15.1 billion for all of the target company. Wachovia jumped 59% to US$6.21.

As credit markets continued to tighten, the prospects of a global slowdown outweighed the success of the US$700 billion financial rescue, sending the Dow Jones Industrial Average down 1.5% to 10325.38 on Friday. The NASDAQ Composite fell 1.5% to 1947.39.

US shares also fell after government figures showed employers cut 159,000 jobs in September, the biggest drop in five years and stoking concern the world's biggest economy will fall into a deep recession.

The unemployment rate was unchanged at 6.1%.

General Electric fell 15% to an 11-year low US$21.57 after selling shares at a discount. Tractor maker Deere & Co. dropped 29% to US$39.24.

The US dollar fell against the euro after the rescue was approved by the US House of Representatives on speculation it had been driven higher by lack of liquidity, which would be reversed as the Treasury bought up toxic debt related to mortgage financing.

The dollar weakened to 1.3769 per euro from $1.38 before the House started its vote. The dollar traded at 105.3 yen from 105.71.

US Treasuries rounded out their sixth weekly advance on the prospects the slowing economic growth will spur the Federal Reserve to cut interest rates. The yield on two-year notes fell four basis points to 1.66% on Friday and the 10-year was unchanged at 3.62%.

European leaders vowed over the weekend to battle against the widening crisis. The UK, France, Germany, and Italy said they "jointly commit to ensure the soundness and stability of our banking and financial system" and will take "all the necessary measures" required, according to a statement. They called on the European Commission start work on bank deposit insurance across the EU states.

Germany's government has led talks on salvaging the Hypo Real Estate bailout, to prevent that nation's second-biggest property lender from failing.

UniCredit SpA, Italy's biggest bank, approved a plan to raise capital to help underpin the lender's financial strength.

European stocks rallied. The FTSE 100 gained 2.3% to 4980.3, led by HBOS, up 18% to 177.25 pence. Germany's DAX 30 gained 2.4% to 5797.03 and the FTSEurofirst 300 rose 3% to 1089.38.

Gold futures for December delivery fell 1.3% to $833.20 an ounce on the New York Mercantile Exchange on Friday, bringing its slide last week to more than 6%.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

Contact Energy Limited (NZX: CEN) Considers Green Capital Bond Offer
Tourism Holdings Limited (NZX: THL) Sells Mighway and SHAREaCAMPER to Camplify
26th October 2021 Morning Report
Harmoney Corp Limited (NZX: HMY) Prices $105m Inaugural ABS Transaction
New Zealand Rural Land Company Limited (NZX: NZL) Agreement to acquire large scale dairy asset portfolio
EROAD Limited (NZX: ERD) launches Clarity Solo Dashcam
22nd October 2021 Morning Report
Pictor ready to roll out game-changing COVID antibody test in New Zealand
Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report