Home' Trinidad and Tobago Guardian : September 7th 2014 Contents SEPTEMBER 7 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
Asurge in dividend-rich utility
stocks helped push the Stan-
dard & Poor's 500 index to
a record Friday. Investors
bought up the stocks after
the government reported
that US employers added fewer jobs than fore-
cast for August. That boosted demand for
bonds and pushed down their yields. In turn,
stocks with big dividends became more attrac-
tive to investors seeking income-paying secu-
The stock market also got a lift from a cease-
fire agreement between Ukraine and Russian-
backed separatists, aimed at bringing an end
to nearly five months of fighting. Stocks had
slumped at the beginning of August amid
worries that the conflict in Ukraine would
spiral out of control and inflame tensions
between Russia and the West.
"That development is a positive," said Jerry
Braakman, chief investment officer of First
American Trust. "Further sanctions on Russia,
and excluding them from the Western
economies, sets global trade back."
The S&P 500 index rose 10.06 points to
2,007.71, surpassing its previous record close
of 2,003.37, set Aug. 29. The index has now
logged 33 all-time highs this year.
The Dow Jones industrial average gained
67.78 points, or 0.4 per cent, to 17,137.36. The
Nasdaq composite gained 20.61 points, or 0.5
per cent, to 4,582.90.
Stocks had started the day lower after a dis-
appointing jobs report.
US employers added 142,000 jobs in August,
snapping a six-month streak of hiring above
200,000 and posting the smallest gain in eight
months, the Labor Department said Friday.
Economists had expected employers to add
Many analysts reasoned that, while the
report was disappointing, the slowdown in
the pace of hiring was not drastic enough to
suggest that the overall trend had changed.
Friday's news was also at odds with reports
earlier this week that showed the economy is
still strengthening. Construction and the serv-
ice industry, for example, were strong.
"I would avoid reading too much into one
number," said Russ Koesterich, chief investment
strategist at BlackRock. "This is an outlier....the
weight of evidence suggests that the US is
going to have a decent third quarter."
Bond prices initially rose on the disappoint-
ing hiring news. The yield on the 10-year
Treasury note, which moves in the opposite
direction of price, dropped as low as 2.41 per
cent, before gradually giving up most of its
gains throughout the day and edging up to
2.46 per cent from 2.45 per cent on Thursday.
The yield has slumped from 3.0 per cent at
the start of this year.
The early drop in bond yields boosted
demand for utility stocks. The lower bond
yields are, the more attractive dividend-rich
utilities appear to investors who are looking
for an income. The slump in bond yields this
year has helped make the utilities sector the
second-best performer in the S&P 500 index,
with a gain of 14 per cent.
Among individual stocks making big moves
Friday, Vertex Pharmaceuticals was the biggest
gainer in the S&P 500 index.
The drugmaker's stock rose $3.49, or 3.8
per cent, to $95.04 after analysts at Goldman
Sachs raised their rating on the stock to "buy"
from "neutral," citing the outlook for the com-
pany's cystic fibrosis treatment.
Michael Kors was the biggest decliner in
The clothing retailer fell US$3.58, or 4.5 per
cent, to US$76.39 after Sportswear Holdings,
one of its principal founding stockholders, said
it was selling its remaining shares in the luxury
retailer. Sportswear Holdings had a 5.7 per
cent stake in the company.
In currency trading, the euro rebounded
from a slump on Thursday, when the European
Central Bank surprised markets by cutting
interest rates and announcing a new stimulus
programme. Europe's single currency rose 0.1
per cent to $1.2952 Friday. The dollar was at
105.07 yen after rising as high as 105.71 yen,
the highest level since October 2008.
Oil fell as the cease-fire between Ukraine
and pro-Russian separatists removed some of
the so-called fear premium.
Benchmark crude oil closed down US$1.16,
or 1.2 per cent, to US$93.29 a barrel in New
York after falling US$1.09 on Thursday. In
other energy trading on the New York Mer-
cantile Exchange wholesale gasoline dropped
1.7 cents to US$2.583 a gallon, heating oil lost
1.7 cents to US$2.819 a gallon and natural gas
fell 2.6 cents to US$3.793 per 1,000 cubic feet.
Most metals rose. Gold closed up 80 cents,
or 0.1 per cent, at US$1,267.30 an ounce. Silver
edged up 1.8 cents, or 0.1 per cent, to US$19.16
an ounce. Copper prices also gained, climbing
to 1.8 cents, or 0.6 per cent, to US$3.17 per
Chinese e-commerce company Alibaba
Group said after the stock market close that
it was seeking to raise up to US$24.3 billion
in its upcoming IPO, an amount that would
be the most ever raised by a company heading
into its stock market debut.
How US stocks performed
The Dow Jones industrial average rose
67.78 points, or 0.4 per cent, to 17,137.36.
The Standard & Poor's 500 index
climbed 10.06 points, or 0.5 per cent, to
end at 2,007.71.
The Nasdaq composite gained 20.61
points, or 0.5 per cent, to 4,582.90.
For the week:
The Dow is up 38.91 points, or 0.2 per
The S&P 500 is up 4.34 points, or 0.2
The Nasdaq is up 2.63 points, or 0.1
For the year:
The Dow is up 560.70 points, or 3.4
The S&P 500 index is up 159.35 points,
or 8.6 per cent.
The Nasdaq is up 406.31 points, or 9.7
LONDON---European stocks dipped on Friday as traders
cashed in on a brisk rally over the past month, fuelled by expec-
tations of fresh stimulus measures by the European Central
The FTSEurofirst 300 index of top European shares closed
0.4 percent lower at 1,396.02 points, retreating from a 6-1/2
year high hit in the previous session, when the ECB cut rates
and announced a new stimulus plan.
Shares exposed to Russia outperformed, however, as repre-
sentatives of Ukraine, the pro-Russian separatist leadership,
Russia and the OSCE security watchdog agreed on a ceasefire.
BP, which owns 20 per cent of Russia's largest oil producer
Rosneft, rose 2.6 per cent.
Shares in tyre maker Nokian Tyres, which generates a third
of its revenue in Russia, Austrian lender Raiffeisen Bank Inter-
national, which relies heavily on Russia for profits, and Danish
brewer Carlsberg, which has a large exposure to the country,
rose between 1 per cent and 1.9 per cent.
The euro zone blue-chip Euro STOXX 50 index closed 0.1
per cent lower at 3,275.25 points after stepping in to "overbought"
territory in the previous session, according to its Relative
Strength Index, a closely watched indicator of share price
Both the Euro STOXX 50 and the FTSEurofirst 300 were
up for the fourth consecutive week.
The euro-area's economic recovery ground to a halt in the
second quarter as investment slid for the first time since the
start of 2013, according to data published today. Gross domestic
product in the three months through June was unchanged from
the first quarter, when it increased 0.2 per cent, the European
Union's statistics office in Luxembourg said. That confirmed
Eurostat's Aug. 14 estimate.
National benchmark indexes slid in 12 of the 18 western-
European markets today. France's CAC 40 Index (CAC) lost
0.2 per cent and the U.K.'s FTSE 100 Index dropped 0.3 per
cent, while Germany's DAX Index added 0.2 per cent.
The volume of Stoxx 600 shares changing hands today was
8.9 per cent higher than the 30-day average, data compiled
by Bloomberg show.
European bourses came off their morning lows after data
showed US employers hired the fewest number of workers in
eight months in August and more Americans gave up the hunt
for jobs, providing a cautious Federal Reserve with more reasons
to wait longer before raising interest rates.
Non-farm payrolls increased by 142,000 last month, the Labour
Department said on Friday, less than economists had expected.
However, the number of long-term unemployed Americans was
the lowest since January 2009 and there was a decline in those
working part-time for economic reasons.
"It's weak enough not to start the tightening fears and strong
enough not to panic about growth. The market basically shrugged
it off," Christian Gattiker, chief strategist and head of research at
Julius Baer, said.
"After the decent run since early August, nobody was expecting
that to boost the market."
In the longer term, Jonathan Stubbs, equity strategist at Citi, saw
further gains in European stocks thanks to the ECB's stimulus.
"European equities are... no longer cheap in absolute terms, but
still super-cheap relative to other asset classes, such as credit,"
Stubbs said in a note. (Reuters)
European shares dip after ECB rally;
Russia-exposed stocks rise
stocks, Ukraine John Bishop, centre, works with fellow traders on the floor of the New York Stock Exchange.
US stocks are opening higher, pushing the Standard & Poor's 500 index closer toward another
Links Archive September 6th 2014 September 8th 2014 Navigation Previous Page Next Page