While you were sleeping: BusinessWire overnight wrap
Dec. 9 – Stock on Wall Street rallied on President-elect Barack Obama’s plan to embark on a massive program of public
works to help revive and the world’s biggest economy and progress on a bailout package for automakers.
The Dow Jones Industrial Average rose 4.2% to 8997.34 and the Standard & Poor’s 500 Index rose 4.5% to 915.77. The Nasdaq Composite rose about 4.8% to 1582.34. General Motors led gaining
stocks, rising 19% to US$4.85 as Democrats and the White House moved closer to finalizing a US$15 billion bailout of the
industry.
Aluminium producer Alcoa jumped 19% to US$9.66. Companies tied to big construction projects including Caterpillar
gained on the prospects for Obama’s spending plan. The maker of earth-moving equipment gained 12% to US$42.98.
Copper, often seen as a bellwether for economic demand, jumped more than 9% on optimism about demand from the biggest
public works program since the 1950s. Copper futures for March delivery jumped 9.7% to US$1.5055 a pound on the New York
Mercantile Exchange.
Oil also advanced, jumping 7% on prospects of demand rising. Crude oil for January delivery rose US$2.85 to US$43.66 a
barrel in New York.
The Reuters/Jefferies CRB Index of 19 raw materials advanced as much as 4.7%
Financial stocks also advanced. Bank of America rose 14% to US$17.28, American Express jumped 10% to US$24.03 and
JPMorgan Chase gained about 10% to US$36.58.
The rescue package being negotiated for automakers would allow the companies to keep their chief executives, according
to House Financial Services Chairman Barney Frank. The proposal may be voted into law this week, including some US$10
billion needed to keep the automakers operating through until March next year.
The United Auto Workers union has demanded a seat on GM’s board in exchange for agreeing to concessions that will help
automakers to win federal funds.
The publisher of the Chicago Tribune and the Los Angeles Times, Tribune Co., sought bankruptcy protection after a slump
in advertising sales. The media company has debt of US$12.9 billion against assets of US$7.6 billion, according to its
Chapter 11 petition.
Chief executive Sam Zell said events “beyond our control have created a perfect storm.”
In a sign of increased government leverage in the affairs of companies, Illinois Governor Rod Blagojevich said the
state would stop doing business with Bank of America until it restored credit to Republic Windows & Doors, a company in Chicago that closed when the bank cancelled its credit line.
The yen and the dollar declined against the euro as the prospects of Obama’s spending plans reduced demand for
currencies with haven status.
The yen fell to 120.49 per euro in New York from 118.18 on Dec. 5. Japan’s currency traded at 93 against the dollar,
from 92.83. The euro rose to $1.2942 from $1.2718.
Stocks also rallied in Europe on Obama’s spending pledge, sending the Dow Jones Stoxx 600 Index up 6.7% to 202.61.
Siemens, the region’s biggest engineering firm and Hochtief AG rose more than 10%. BHP Billiton surged 16% and Royal
Dutch Shell Plc jumped 8.3%.
Germany’s DAX 30 Index rose 7.6% to 4715.88, with Daimler gaining about 10% on hopes of a breakthrough in the U.S.
automaker rescue. Deutsche Bank rose 12%. Linde, an engineering and gas company, jumped 17%.
France’s CAC 40 rose 8.7% to 3247.48 and in London, the FTSE 100 Index advanced 6% to 4300.06.
(Businesswire.co.nz)
ENDS