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While you were sleeping: BusinessWire overnight wrap

Tuesday 23rd December 2008

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Stocks on Wall Street fell as signs of weaker corporate earnings underlined concern that the world's biggest economy faces a prolonged recession.

Drugstore chain Walgreen posted lower-than-expected earnings, workforce firm Manpower withdrew a profit forecast and seed producer Monsanto stock dropped after Goldman Sachs Group said the economic slump will sap income.

The Dow Jones Industrial Average fell 1.9% to 8415.27 and the Standard & Poor's 500 Index declined 2.9% to 861.84. The Nasdaq Composite dropped 3.5% to 1510.35 as Apple declined 5.3% to US$85.20 and Google Inc. fell 5.5% to US$293.20.

Walgreen fell 5.4% to US$24.67 and Manpower fell 16% to US$30.46. Monsanto dropped 8% to US$65.75.General Motors tumbled 18% to US$3.69 after Japanese rival Toyota forecast the first operating loss in its 71-year history, a sign that the global slump is eroding demand for cars.

Insurers MetLife and Prudential Financial tumbled more than 10% amid concern losses on commercial mortgages will pile up as the recession lingers.

Analysts at Reis Inc. said U.S. commercial properties at risk of default could triple if rents from offices, retailers and apartment buildings falls even 5%, Bloomberg reported. Lenders who sold commercial mortgage-backed securities to pension funds, investment banks and overseas governments have been lumbered with over US$1 trillion in losses and asset writedowns, the report said.

Yields on two-year U.S. Treasury notes rose after the federal government sold US$38 billion of the debt at higher-than-expected yields. The two-year notes rose 4 basis points to 0.8%.

The U.S. dollar rose against the yen after the Bank of Japan, which cut is benchmark interest rate to 0.1% last week, warned the world's second-largest economy is deteriorating further.

The yen fell to 90.07 per dollar from 89.31 on Friday and declined to 125.63 per euro from 124.22. The dollar fell to $1.3957 per euro from $1.3912.

Crude oil fell as traders bet OPEC's efforts to reduce production won't be enough to lift prices in a sagging global economy. Japan's Ministry of Finance released figures yesterday showing crude-oil imports fell 17% to 3.71 million barrels a day in November.

Crude oil for February delivery fell 5.8% to US$39.92 a barrel on the New York Mercantile Exchange. Gold futures for February delivery rose 1.2% to US$847.20 an ounce in New York.

Stocks fell for a fourth day in Europe amid concern the global slump is eroding earnings. Dow Jones Stoxx 600 Index fell 1.6% to 193.32, bringing its slump this year to a record 47%.

Germany's DAX 30 declined 1.2% to 4639.02, with Daimler sliding 4.6% and BMW dropping 3.9% on Toyota's forecast operating loss. Continental declined about 14% and Deutsche Bank slid 6%.

France's CAC 40 declined 2.3% to 3151.36, paced by a 7% decline for ArcelorMittal and an 8% drop for Dexia SA. In London, the FTSE 100 Index fell 0.9% to 4249.16, heading for a record annual slump. Mining companies BHP Billiton and Rio Tinto fell on concern weaker global demand will hamper earnings. Retailers fell, led by Home Retail Group amid signs stores are increasing their discounts to underpin Christmas sales.


By Jonathan Underhill

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