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While you were sleeping: BusinessWire overnight wrap

Thursday 6th November 2008

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Stocks on Wall Street fell on further signs the world's biggest economy is in a slump and speculation president-elect Barack Obama won't be able to do enough to reverse the slide.

The Dow Jones Industrial Average fell 4.1% to 9234.61, the Standard & Poor's 500 Index declined 4.2% to 963.35 and the Nasdaq Composite slid 4.2% to 1705.6.

Stocks fell after the Institute for Supply Management's US non-manufacturing index, a measure of service industries that covers nearly 90% of the economy, fell to a record low 44.4, lagging behind economists' forecasts. Labor Department figures tomorrow may show the US economy shed 200,000 jobs last month.

Boeing declined 6.6% to US$49.68 after analysts at UBS forecast a 3% drop in global air traffic next year. Citigroup fell 11% to US$13.10 and Bank of America declined 7.3% to US$22.75. Nucor Corp, the No. 1 US steel producer, slid 7% to US$36.88 after ArcelorMittal slashed output as demand waned.

Bond insurers MBIA and Ambac Financial Group reported worse-than-expected losses as the credit market rout forced them to increase claim reserves. MBIA stock sunk about 20% after it posted a net loss of US$806 million. Ambac tumbled more than 30% after reporting a loss of US$2.43 billion.

Finance company GMAC LLC posted a third-quarter loss of US$2.52 billion, reflecting the slump in housing and auto markets. That's its fifth straight quarterly decline and the company warned that its Residential Capital mortgage unit could fail after losses of some US$9 billion over the past eight quarters.

The cost of borrowing dollars in London for three months fell to a four year low on optimism that central banks flooding markets with cash is helping to ease the credit freeze. The London interbank offered rate, or Libor, fell 20 basis points to 2.51%. The overnight rate fell 6 basis points to 0.32%, a record low.

European stocks fell for the first time in seven sessions, based on the Dow Jones Stoxx 600 Index, which shed 2.3% to 228.13. ArcelorMittal, the world's biggest steelmaker, tumbled 15% after doubling cuts to production. France's largest bank, BNP Paribas, fell 1.5% after posting third-quarter earnings that missed estimates.

France's CAC 40 fell about 2% to 3618.11 and Germany's DAX 30 declined 2.1% to 5166.87. In the UK, the FTSE 100 Index fell 2.3% to 4530.73.

BP Plc dropped 1.9%to 522 pence and Royal Dutch Shell Group declined 3.5% to 1774 pence as the price of oil declined. Rio Tinto fell 6% to 2948 pence and BHP Billiton dropped 1.6% to 1140 pence as prices of metals declined.

Crude oil fell more than $4 a barrel after a report from the US Energy Department showed gasoline inventories increased. Gasoline supplies rose 1.12 million barrels to 196.1 million barrels last week, according to the report.

Crude oil for December delivery fell 6.9% to US$65.69 a barrel on the New York Mercantile Exchange.

Gold declined on concern a weakening US economy will have less need for commodities. Gold futures for December delivery fell 2% to US$742.40 an ounce on the New York Mercantile Exchange.

The Reuters/Jefferies CRB Index of 19 raw materials fell 2.6%, adding to a 5.3% slump yesterday.

Retail sales in Europe fell in September as weakening global economic growth sapped consumer confidence. Sales fell 1.6%, according to the European Union's statistics office.

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