While you were sleeping: Overnight wrap 28/1/09

While you were sleeping: BusinessWire Overnight wrap

Jan. 28 – U.S. consumer confidence slumped to a record low this month amid accelerating job cuts and plummeting home values, signaling a broader and deeper recession for the world’s biggest economy.

The Conference Board’s consumer confidence index fell to 37.7, the lowest since records began in 1967 and weaker than economists had expected. The S&P/Case-Shiller 20-city index, a measure of house prices in the biggest U.S. metropolitan areas, fell 18.2% in November from the same month of 2007, a record drop for the eight-year-old index.

The yen rose against the U.S. dollar as weaker U.S economic data spurred demand for the Japanese currency.

The yen gained to 88.93 per dollar from 89.10 and edged higher to 117.47 per euro from 117.51 yesterday. The dollar traded at $1.3202 per euro from $1.3189.

The global economy is heading for a “severe recession” with the U.S. set to lose 6 million jobs, pushing the jobless rate to at least 9%, while China’s growth slows to less than 5%, New York University Professor Nouriel Roubini said in a Bloomberg Television interview. “We have for the first time in decades a global synchronized recession. This is not your kind of traditional minor recession,” he said.

Crude oil had the biggest decline in two weeks after the weak data, which signaled waning demand for fuel, driving up inventories. The U.S. Energy Department is scheduled to release its latest estimates of stockpiles tomorrow.

Crude oil for March delivery fell 8.9% to US$41.67 a barrel on the New York Mercantile Exchange. Prices have shed more than 50% in the past 12 months.

The slew of weak data didn’t stop shares gaining on Wall Street as companies ranging from American Express to Texas Instruments posted better-than-expected earnings.

American Express, the biggest U.S. credit card company, posted a 72% drop in fourth-quarter earnings on loan losses and reduced spending by customers. The results beat expectations of an even worse slump as the firm cut costs, helping the stock jump 9.5% to US$16.64 and leading the Dow Jones Industrial Average higher.

Texas Instruments climbed 3.9% to US$15.34 after announcing 3,400 job cuts, or 12% of its workforce. Fourth-quarter revenue fell a less-than-expected 30% to US$2.49 billion while earnings tumbled 86%. The company is predicting annual cost saving of US$700 million.

Bank of America climbed 7.8% to US$6.48 and Citigroup rose 6.9% to US$3.56. Verizon Communications fell 3.7% to US$29.84, the worst performer on the Dow, after reporting it added a net 1.4 million new wireless customers, fewer than some analysts had predicted.

The Dow rose 0.9% to 8192.26 and the Standard & Poor’s 500 Index climbed 1.2% to 846.9. The Nasdaq Composite rose 1.2% to 1507.81.

Stocks in Europe were mixed. The Dow Jones Stoxx 600 Index rose 0.1% to 188.31 after Siemens posted better-than-expected earnings, lifting its stock by 2.8%. Allied Irish Banks jumped 18% and STMicroelectronics climbed 2%.

The FTSE 100 Index fell 0.4% to 4194.41 as construction materials company Wolseley dropped 10% and 3I Group fell 5%. Germany’s DAX 30 slipped 0.1% as Deutsche Borse fell 3%. Infineon climbed 6.4%.

In France, the CAC 40 declined 0.03% to 2954.53. Dexia SA fell 3.2% and Sanofi Aventis declined 2.7%.

Gold futures for April delivery fell 1% to US$901.40 an ounce on the New York Mercantile Exchange.

Copper prices had the biggest tumble in seven weeks amid waning demand for the metal and rising stockpiles. Copper futures for March delivery fell 6.4% to US$1.4845 a pound on the New York Mercantile Exchange.

(Businesswire)

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