Friday 14th November 2008
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US Labor Department figures showed 3.9 million people were on the benefit in the week ended November 1. Other government figures showed American exports slumped and imports fell the most on record in September.
The US budget deficit climbed to a record US$237 billion last month, according to the Treasury Department, as federal funds were used to prop up ailing banks under the Troubled Asset Relief Program, or TARP, program.
The yawning deficit may restrict President-elect Barack Obama's ability to bring in further stimulus measures as industries, including the automakers, queue for assistance.
Europe's largest economy, Germany, sank into recession in the third quarter, according to figures yesterday, contracting a worse-than-expected 0.5% after shrinking 0.4% in the second quarter. Engineering firm Siemens AG reported dwindling profits and announced plans to cut more than 16,000 jobs.
Economies in the Organisation for Economic Cooperation and Development will shrink 0.3% next year, the OECD said in forecasts released in Paris yesterday, down from the 1.4% rate of growth predicted for 2008. Last week the International Monetary Fund predicted a contraction in the US, Europe and Japan.
In the UK, British Telecom announced 10,000 job cuts. The pound fell to a record low against the euro after Bank of England Governor Mervyn King warned of a worsening recession. The slump has spurred the BOE to slash its benchmark rate to a 50-year low of 3%.
Copper fell to a three year low in New York, extending its slide after China reported slowing growth in industrial production yesterday. Copper futures for December delivery fell 1.9% to US$1.624 a pound on the New York Mercantile Exchange.
Gold futures fell on the prospects of weakening demand for precious metals as the global economy slumps. Gold futures for December delivery fell 0.2% to US$716.60 an ounce in New York. Silver fell 3.6% to US$9.14 an ounce.
Crude oil rebounded as some traders deemed its recent slide excessive. Crude for December delivery rose 3.7% to US$58.24 a barrel on the New York Mercantile Exchange, having slumped from a record US$147.27 in July.
The yen declined against the dollar and the euro after US stocks strengthened and European equities halted their slide, lifting some investors' appetite for higher-yielding investments funded with loans in Japan's currency.
The yen weakened to 96.46 per US dollar in New York from 95.01. It fell to 122.64 per euro from 118.77. The euro was at $1.2705.
The rebound in oil helped lift shares of Exxon Mobil and Chevron, pushing the Dow Jones Industrial Average up 2.5% to 8492.53. Exxon advanced 5.2% to US$72.43 and Chevron rose about 7% to US$71.96. Walt Disney gained 5.7% to US$21.31 and Caterpillar advanced 9% to US$38.32.
The Standard & poor's 500 Index rose 2.5% to 873.55 and the Nasdaq Composite gained 1.8% to 1525.94.
Computer maker Dell fell 7% after Goldman Sachs rated it a 'sell'.
European stocks fell after Germany fell into recession and the OECD warned of a recession for its members. The Dow Jones Stoxx 600 Index declined 0.6% to 204.08.
The FTSE 100 Index fell 0.3% to 4169.21, with BHP Billiton sinking 2.3% and Barclays Plc declining 6.2%. Germany's DAX 30 Index gained 0.6% to 4649.52 and France's CAC 40 gained 1.1% to 3269.46.
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