Home' Trinidad and Tobago Guardian : September 14th 2014 Contents SEPTEMBER 14 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
The prospect of rising interest
rates sent the stock market to
its first weekly loss since early
The Standard & Poor's 500 index fell 11.91
points, or 0.6 per cent, to end at 1,985.54 on
Friday. The index was down 1.1 per cent for
Declines were led by utility companies and
other stocks that pay high dividends. Those
stocks have been in favor this year as investors
hunt for other sources of income because
bond yields have been low.
Now that the yield on the ultra-safe 10-
year Treasury note has shot to 2.61 per cent---
its highest level in two months---investors are
less willing to hold riskier stocks, even those
paying a rich dividend.
The recent rise in bond yields was bolstered
Friday by a report showing that US retail sales
rose faster last month than economists fore-
cast. That reinforced expectations that the
Federal Reserve may start hiking interest rates
sooner than expected. The central bank has
nearly finished winding down its stimulus
program and policy makers start a two-day
meeting on Tuesday.
The yield on the 10-year Treasury note has
now climbed for seven straight days.
"As the economic data continues to move
along this positive trajectory, interest rates
are going to rise," said Quincy Krosby, a market
strategist at Prudential Financial. "The market
is going to have to accept that."
Other stock indexes fell Friday. The Dow
Jones industrial average lost 61.49 points, or
0.4 per cent, to 16,987.51 The Nasdaq com-
posite dropped 24.21 points, or 0.5 per cent,
The yield on the 10-year Treasury note has
risen from 2.34 per cent at the start of the
month and is trading at its highest level since
Higher interest rates mean that companies
and consumers have to pay more to borrow,
leaving them with lower profits and less money
Yet investors shouldn't jump the gun on
concerns that rising rates will end the stock
market's five-year bull run, said Randy Fred-
erick, a managing director of trading and
derivatives with the Schwab Center for Finan-
cial Research. As long as the economy is
improving, stocks can continue to move high-
"Generally, the market goes through a cor-
rection and then the bull market continues,"
On Friday, high dividend payers, like utilities
and telecoms stocks, sold off. Real estate
investment trusts also slumped.
Utility stocks fell 1.8 per cent, the biggest
drop of the 10 sectors that make up the S&P
500. Energy stocks dropped 1.5 per cent and
phone company shares slumped 1.2 per cent.
The price of oil fell on concerns that global
demand is falling while supplies remain ample.
Benchmark US crude fell 52 cents to close at
US$92.27 a barrel on the New York. Brent
crude, a benchmark for international oils used
by many US refineries, fell 12 cents to close
at US$97.96 in London. It was Brent's first
close below US$98 since April of 2013.
Wholesale gasoline fell 0.5 cent to close at
$2.519 a gallon, heating oil fell 1.5 cents to
close at US$2.741 a gallon and natural gas rose
3.4 cents to close at US$3.857 per 1,000 cubic
In metals trading, gold fell US$7.50 to
$1,231.50 an ounce. Silver rose 1 cent to
US$18.61 an ounce and copper climbed 1.4
cents to US$3.11 a pound.
In currency trading, the dollar remained
firm. The euro was 0.2 per cent higher at
US$1.2950 while the dollar rose 0.3 per cent
to 107.36 against the Japanese yen.
making big moves:
• Conversant, a provider of online advertising
services, climbed US$8.09, or 30 per cent, to
US$34.80. The rise came after Alliance Data
said late Thursday it was buying Conversant
for about US$2.3 billion.
• Health Care REIT, an investment trust
that invests in senior housing and health care
real estate. The company said it was selling
an additional US$1.1 billion of stock to repay
debt and fund investments. Its stock dropped
US$3.24, or 5 per cent, to US$63.25.
The stock market logged its first weekly loss
since early August on Friday after a report
showed that retail sales in August rose more
than economists had forecast. That reinforced
expectations that the Federal Reserve could
start hiking interest rates sooner than expect-
ed.Dividend-rich utility stocks and energy
stocks led the losses.
US stocks decline
In this Tuesday, August 19, 2014, file photo, trader Leon Montana works on the floor of the New York Stock Exchange. US stocks opened slightly
higher on Tuesday, August 26, 2014, as investors weighed the latest batch of corporate deal news and mixed economic reports on home prices
and demand for big-ticket items. The Standard & Poor's 500 index held at 2,000, extending the prior day's gains. AP
The Dow Jones industrial aver-
age fell 61.49 points, or 0.4 per
cent, to 16,987.51
The Standard & Poor's 500 index
rose 11.91 points, or 0.6 per cent,
The Nasdaq composite dropped
24.21 points, or 0.5 per cent, to
For the week:
The Dow is down 149.85 points,
or 0.9 per cent.
The S&P 500 is down 22.17
points, or 1.1 per cent.
The Nasdaq is down 15.30
points, or 0.3 per cent.
For the year:
The Dow is up 410.85 points, or
2.5 per cent.
The S&P 500 index is up 137.18
points, or 7.4 per cent.
The Nasdaq is up 391.01 points,
or 9.4 per cent.
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