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While you were sleeping: BusinessWire overnight wrap

Friday 12th December 2008

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US exports fell in October, unexpectedly widening the nation's trade deficit to US$57 billion, as economies of its biggest markets shrank, sapping demand.

Exports from the US fell 2.2% to US$152 billion while exports dropped 1.3% to US$208.9 billion, according to US Commerce Department figures. The trade gap stoked concern about the extent of the slump in the world's biggest economy, where the number of people seeking unemployment benefits rose to 573,000 last week, the highest since 1982, according to Labor Department figures.

Stocks on Wall Street fell amid concern US economic slump will be deeper and longer, and fears that the US$14 billion bail-out planned for the auto industry may stumble for lack of support in the Senate. General Motors fell 11% to US$4.10, leading a 2.2% decline in the Dow Jones Industrial Average to 8567.24. Ford Motor fell 10% to US$2.91.

The White House has urged Republicans to support the bailout, aimed at preventing the collapse of GM, Ford, and Chrysler, which is owned by buyout firm Cerberus.

Republicans may not heed to urging of President George Bush, whose influence is waning, and may have the numbers to stall the rescue package in the Senate, where it needs 60 votes.

Financials also fell, paced by a 6% decline in Bank of America to US$15.69. JPMorgan Chase fell 6% to US$31.48 and Citigroup declined 5.3% to US$7.86. Chevron gained 3% to US$80.97 and Exxon Mobil rose 1.3% to US$81.12 as the price of oil gained on OPEC's intention to make deep cuts to production.

The Standard & Poor's 500 Index fell 2.6% to 875.47 and the Nasdaq Composite dropped 3.4% to 1512.85.

US President-elect Barack Obama yesterday named Tom Daschle to lead reform of the American healthcare system. Obama has been forced to refute claims of involvement in a scandal over Illinois Gov. Rod Blagojevich, who has been accused of trying to sell the president-elect's now-vacant Senate seat.

US Treasuries advanced after the sale of 10-year notes at a record-low yield of 2.67%. One-month bill rates dropped below zero.

The yield on 10-year Treasuries fell 4 basis points to 2.65%. Two-year notes fell four basis points to 0.81 percent.

The US dollar weakened as costs of borrowing in the currency fell, a signal that year-end demand may be les than expected.

The dollar fell to $1.3319 per euro from $1.3023 the previous day. The greenback weakened to 91.75 yen from 92.76. The euro rose to 122.16 yen from 120.78.

Gold rose to the highest level in about eight weeks as the US dollar fell, stoking demand for the precious metal as an alternative investment.

Gold futures for February delivery rose 2.2% to US$826.60 an ounce in New York. Silver futures rose 2.2% to US$10.425 an ounce.

Crude oil surged 11% after the Saudi Arabian oil minister Ali al-Naimi said the kingdom pumped 8.493 million barrels of oil a day last month, 287,000 barrels a day less than the International Energy Agency had estimated.

Crude oil for January delivery rose to US$48.26 a barrel on the New York Mercantile Exchange.

European shares fell for the first day in four, led by financials, amid rising concern about the extent of recession in the region. Energy stocks rose as the price of crude oil advanced.

HBOS dropped 2.6%, Commerzbank slid 2.4% and Royal Bank of Scotland declined 3.5%.

The Dow Jones Stoxx 600 Index fell 0.8% to 203.79. On Germany, the DAX 30 fell 0.8% to 4767.2 while France's CAC 40 slipped 0.4% to 3306.13.

The UK's FTSE 100 Index rose 0.5% to 4388.69, led by oil producers. Tullow Oil surged 20% after reporting successful drilling in Africa, adding to estimates reserves. BP Plc gained 4.8% and Cairn Energy Plc advanced 12%.

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