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While you were sleeping: MBIA posts loss

While you were sleeping: Dollar gains from 15-month low as stocks pare gains

Nov. 11 (BusinessWire) – Shares on Wall Street pared their gains from a six-day advance after MBIA Inc., the world’s biggest bond insurer, posted a loss on credit derivatives, sending its stock down by more than a fifth.

Weaker stocks helped lift the U.S. dollar from a 15-month low as investors eschewed riskier, or higher yielding investments for the safety of the world’s reserve currency, weighing on prices of metals and oil.

The Standard & Poor’s 500 fell 0.04% to 1093.09 and the Dow Jones Industrial Average gained 0.1% to 10239.71. The Nasdaq Composite fell 0.1% to 2152.43.

MBIA tumbled 24% to US$3.67. Fluor Corp., the engineering and construction firm, declined 7.5% to US$44.40 after trimming its full-year profit forecast.

Exxon Mobil declined 0.1% to US$72.78 as the price of crude oil fell. Gold miner Newmont Mining slid 0.1% to US$50.51 with the price of gold.

Electronic Arts fell 6.6% to US$18.25 after the computer game developer reported a wider second-quarter loss.

The U.S. dollar rose as stocks fell. The Dollar Index, which measures the greenback against a basket of six major currencies, gained 0.1% to 75.14.

The dollar strengthened to US$1.4972 per euro, from US$1.4999 and traded at 89.78 yen from 89.93. The euro weakened to 134.41 yen from 134.91.

Federal Reserve officials said the U.S. economy still faces hurdles to recovery, including high unemployment and reliance on government aid. San Francisco Fed President Janet Yellen and Atlanta Fed President Dennis Lockhart both said the economy was vulnerable.

"The strength and durability of the expansion is in question," Yellen said in a speech. “High unemployment, weak job growth and paltry wage increases are a recipe for sluggish consumer spending growth and a tepid recovery."

Lockhart told a meeting in Atlanta, Georgia, that the pace of economic growth will be "relatively subdued.”

"The situation is much improved, but there are sobering aspects of the economic picture," he said.

Christopher Dodd, chairman of the U.S. Senate Banking Committee, proposed the formation of a new bank regulator, taking responsibility from the Fed and the Federal Deposit Insurance Corp. as part of legislation that is aimed at avoiding a repeat of the financial crisis.

Under Dodd’s plan, the Office of the Comptroller of the Currency and the Office of Thrift Supervision would be abolished and their functions absorbed into the Financial Institutions Regulatory Administration.

The proposal “will replace the myriad government agencies that failed to rein in risky schemes with a single, accountable federal banking regulator,” Dodd told a media conference.

Crude oil for December delivery fell as much as 1.1% to US$78.55 a barrel and recently traded at US$79.29 on the New York Mercantile Exchange.

Copper fell as the greenback strengthened and amid concern demand in China, the world’s biggest consumer of the metal, is abating.

Copper for December delivery copper slipped 0.7% to US$2.9475 a pound on the New York Mercantile Exchange.

Gold for December delivery rose 60 cents to US$1,102 an ounce in New York.

In Europe, the Dow Jones Stoxx 600 Index fell 0.2% to 245.31, with a slide in German investor confidence weighing on equities.

Barclays Plc fell 5.1% after the second-biggest U.S. lender reported a 54% slump in profit. Building materials group CRH Plc fell 2.2% after forecasting a 55% drop in profit this year.

HSBC Holdings Plc climbed 4% after the lender said impairment charges fell in the third quarter and underlying earnings are tracking ahead of last year’s.

Among national benchmarks, Germany’s DAX 30 fell 0.1% to 5613.20 after the ZEW Center for European Economic Research’s index of investor and analyst expectations fell more than expected to 51.1 from 56 in October.

Volkswagen AG preferred shares fell 16% Credit Suisse Group and Goldman Sachs Group said they sold 25 million of the securities controlled by Qatar Holding LLC.

France’s CAC 40 was unchanged at 3785.59 and the U.K.’s FTSE 100 fell 0.1% to 5230.55.

(BusinessWire)

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