While you were sleeping: Overnight wrap 26/1/09

While you were sleeping: BusinessWire overnight wrap

Jan. 26 – Crude oil rose more than 6% to a two-week high in New York on Friday on speculation that OPEC will succeed in reducing global stockpiles by cutting production.

Crude oil for March delivery rose US$2.80 to US$46.47 a barrel on the New York Mercantile Exchange after Petrologistics, an oil consultancy, said OPEC’s estimated output would drop by 1.55 million barrels to 26 million a day this month, heading for the 2.2 million cut that members of the cartel agreed to last month.

Oil led gains in commodities on Friday. Copper climbed after a magnitude 4.9 earthquake in Chile stoked concern about supply constraints from the nation that it the biggest source of the metal.

Copper futures for March delivery rose 5.4% to US$1.472 a pound on the New York Mercantile Exchange. The metal has dropped more than 60% from its peak in May.

Gold rose above US$900 an ounce in New York as some investors sought the precious metal as a haven. Gold futures for February delivery rose 4.3% to US$895.80 an ounce on the New York Mercantile Exchange.

In the U.K., government figures showed gross domestic product contracted a greater-than-expected 1.5% in the fourth quarter, confirming its economy has fallen into recession. Manufacturing fell 4.6% in the final three months of 2008 while business and finance fell 0.5%.

Manufacturing and service industries in Europe shrank for the eighth straight month in January on weaker consumer spending and a drop in demand for the region’s exports as the global slump endures.

An index of manufacturing and services was at 38.5 compared, little changed from 38.2 in the previous month, which was the lowest since the Markit Economics survey started in 1998. A reading below 50 indicates a contraction.

The Dow Jones Stoxx 600 Index fell 0.2% to 182.49 on Friday, led by a 19% slump in Swiss RE and a 15% decline in computer game designer Ubisoft Entertainment.

The FTSE 100 Index was little changed, falling 0.01% to 4052.47. Barclays and Old Mutual both fell more than 13%. Xstrata fell 5.8%.

Germany’s DAX 30 fell about 1% to 4178.94 as Infineon dropped 4.9%, Deutsche Bank fell 4.6% and Lufthansa fell 4.3%. France’s CAC 40 slipped 0.7% to 2839.14 as Lafarge and BNP Paribas both fell almost 8%.

U.S. President Barack Obama on Friday renewed efforts to win Congress approval for his US$825 billion economic stimulus package.

“We are experiencing an unprecedented economic crisis that has to be dealt with and dealt with rapidly," he told reporters in Washington.

Benchmark indexes on Wall Street were mixed. The Dow Jones Industrial Average fell 0.6% to 8077.56. General Electric dropped 11% to US$12.03, leading the Dow lower after the company forecast US$10 billion of credit losses this year.

Coca-Cola fell 2.1% to US$42.20 and Procter & Gamble fell 1.7% to US$56. Citigroup rose 12% to US$3.47 and Bank of America climbed 9% to US$6.24.

The Standard & Poor’s 500 Index gained 0.5% to 831.95, helped by rising bank stocks. The Nasdaq Composite rose 0.8%

to 1,477.29 after Google Inc. posted earnings that beat estimates, helping lift its stock by 5.9% to US$324.70.

Google, the world’s most popular Internet search engine, posted fourth-quarter profit of US$382 million, or $1.21 a share, according to a company statement.

Pfizer, the world's largest drugmaker, is in negotiations to buy rival Wyeth on a deal that could be worth US$67 billion, Reuters reported, citing people familiar with the situation.

Pfizer may pay US$50 per share though the price is still being negotiated.

The yen rose to the highest in almost four years and gained against the euro as the prospects of global recession reduced risk appetite and polished the haven appeal of Japan’s currency.

The yen was little changed at 88.76 per dollar and gained about 0.1% to 115.3 per euro. The European region’s common currency was little changed against the dollar at $1.2989.

The British pound weakened to a 23-year low against the dollar of $1.3502 before paring the decline to be at $1.3799. Sterling has weakened since the British government announced its second bailout of banks, which may fuel the budget deficit in a nation now officially in recession.

(Businesswire)

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