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While you were sleeping: BusinessWire overnight wrap

Thursday 14th August 2008

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Credit concerns and worries about US consumer spending led stocks lower on Wall Street on Wednesday, one day ahead of a key inflation report.

The Dow Jones industrial average fell 109.51 points, or 0.94%, to 11,532.96, while the Standard & Poor's 500 Index slipped 3.76 points, or 0.29%, to 1,285.83. The Nasdaq Composite Index was down 1.99 points, or 0.08%, at 2,428.62.

Caterpillar, a bellwether for the US economy, was among the top drags on the Dow industrials after fellow manufacturer Deere & Co posted disappointing earnings.

Financial stocks fell for a second day on fears of more credit losses. The Texas securities commissioner said regulators were close to reaching a settlement that would force some banks to repurchase billions of dollars of the now-illiquid auction-rate securities at face value.

Four of Wall Street's biggest investment banks were downgraded by an analyst at Merrill Lynch & Co, who said the global credit crisis has worsened and may prompt investors to try to avoid the carnage.

Retailers fell, after women's apparel retailer Liz Claiborne Inc cut its 2008 profit forecast, citing economic concerns, and Macy's Inc cut its fiscal-year earnings forecast.

Retail Stocks

The Standard & Poor's 500 Retailing Index declined the most since July 10 after the Commerce Department reported the first decrease in chain-store sales in five months.

US crude oil futures jumped $3.44 to $116.45 a barrel after weekly government data showed an unexpectedly large decline in crude oils stocks.

The Nasdaq outperformed the other indexes, helped by Apple Inc, whose shares rose following news it will expand sales of its iPhone in an alliance with top US electronics chain Best Buy. Apple shares shot up 1.5% to $US179.30.

The yen fell 0.2% to 163.42 per euro at 4:20pm in New York, from 163.11 yesterday, after reaching 161.40, the strongest since May 16. The dollar was little changed at $1.4919 per euro, compared with $1.4926 yesterday, when it reached a 5 1/2-month high of $1.4816. Against the dollar, the yen fell 0.2% to 109.53, from 109.27.

The pound declined to a 22-month low against the dollar after the Bank of England cut its growth forecast and unemployment increased the most in almost 16 years. Sterling fell for a ninth day against the greenback, decreasing as much as 1.7% to $1.8640, the lowest level since October 2006. The pound dropped as much as 1.5% to 79.86 pence per euro, the weakest since July 14.

Treasuries declined, pushing up yields on 10-year notes from near a four-week low, before a government report tomorrow forecast to show annual inflation quickened to more than 5%.

The 10-year note yield climbed five basis points to 3.95% at 4:13pm in New York, according to BGCantor Market Data. The 4% security due in August 2018 fell 13/32, or $4.06 per $1,000 face amount, to 100 14/32. The two-year yield gained 5 basis points to 2.48%.

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