Home' Trinidad and Tobago Guardian : September 28th 2014 Contents SEPTEMBER 28 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
NEWS | SBG11
Last week finished with the US
major indices trading at or near
all-time highs. The Dow Jones
Industrial Average (Dow) made
three record closes. The S&P
500 was trading up 8.77 per cent
year to date and the Nasdaq Composite was
up 9.65 per cent.
This week was a volatile week as the Dow
finished each day up or down more than 100
points. When it was all over, the Dow dropped
only 166.97 points or 0.97 per cent to 17,112.77.
The S&P 500 fell 27.64 points or 1.37 per cent
to 1982.76 while the Nasdaq declined 67.60
points or 1.48 per cent to 4,512.19. The five
year, 10 year and 30 year Treasury yields fell
.02 per cent, 0.075 per cent and 0.08 per cent
to 1.80 per cent, 2.535 per cent and 3.22 per
Gold add US$2.50 to US$1218.20 an ounce
while crude oil --WTI Cushing increased
US$1.01 to US$93.44 a barrel. The dollar closed
at 1.268 to the Euro and 1.625 to the British
The week's tone was set from the first eco-
nomic report Monday morning. A weaker than
expected existing home sales in the month of
August was the excuse for market to head
lower on Monday as the Dow declined 107
points or -0.62 per cent. The S&P 500 gave
up -0.80 per cent and the Nasdaq Composite
fell 1.14 per cent. Long treasury yields headed
lower on fear of the weakening growth. The
30 year Treasury yield declined 0.01 per cent
to 3.29 per cent. The price of crude oil --WTI
Cushing fell US$0.89 or 1 per cent to US$91.52
a barrel on strong supply data.
On Tuesday, US manufacturing activity
hovered a near 4 ½ year high. But fearing
global growth is slowing, the market started
higher then faded into negative territory as
stocks suffered their third consecutive decline.
The Dow gave back another 116.81 points or
-0.68 per cent. The Nasdaq results were slight-
ly better by only declining only -0.42 per cent.
The 30-year Treasury yield fell another 5 basis
points to 3.24 per cent. The MSCI EAFE index,
which tracks developed foreign markets, fell
-0.66 per cent. The MSCI EM (emerging mar-
kets) index gave up -1.29 per cent. Crude oil---
WTI Cushing rebounded US$0.68 to US$91.55
a barrel. Gold rebounded US$8.70 an ounce
to US$1223.85 after US led airstrikes against
in Syria and Iraq.
On Wednesday, new single family homes
surged 18 per cent in August to their highest
level in more than six months. This may explain
Monday's lower than expected existing home
sales let down. Stocks broadly advanced as
nine out of ten sectors in the S&P 500 showed
positive gains. The Dow rebounded 154.19
points or 0.90 per cent while the Nasdaq
gained 46.53 points or 1.03 per cent and the
S&P 500 increase 15.53 points to 1998.30.
International indexes continue to suffer as
the MSCI EAFE declining -0.64 per cent and
the MSCI Europe index fell 1.38 per cent. The
dollar continued it rally to 4- year highs closing
at 1.278 to the Euro and 1.634 to the British
Pound. Crude oil --WTI Cushing rose US$1.34
to US$92.90 a barrel. Gold fell US$6.27 an
ounce to $1217.07.
On Thursday, stocks did not respond to
latest stronger than expected economic data.
The Commerce Department said August non-
defense capital goods orders excluding aircraft
(core capital goods orders) rose 0.6 per cent.
July's core capital goods orders were revised
to -0.2 per cent from -0.7 per cent. Stocks
extended the recent correction as the Dow
dropped 264.26 points or -1.54 per cent to
16,945. The Nasdaq fell 1.94 per cent and S&P
500 declined 32.41 points or -1.62 per cent
Foreign stock had a better day as the MSCI
EAFE finished flat, MSCI Europe added 0.73
per cent and MSCI EM was 0.24 per cent
higher. A flight to safety caused the 30 year
Treasury price to rise and yield declined to
3.21 per cent. Crude Oil --WTI Cushing slipped
US$0.31 to US$92.49 a barrel.
On Friday, the Commerce Department raised
its estimate of growth in gross domestic prod-
uct to a 4.6 per cent annual rate, up from 4.2
per cent pace reported last month. Stocks
came roaring back to cut losses for the week.
The Dow rose 167.35 points or 0.99 per cent
to 17,113.15. The S&P 500 rebounded 0.85 per
cent while the Nasdaq gained 1.01 per cent.
The dollar continued to rally against the Euro
and British pound. Crude oil --WTI Cushing
added US$0.91 to US$93.44.
This summer, the Dow corrected 4.5 per
cent during a three-week span from July 16
to August 7. During the same time, the S&P
500 declined 3.64 per cent and the Nasdaq
Composite gave up 2.06 per cent.
David Fox is a financial adviser with Mor-
gan Stanley Wealth Management in Boca
Raton, Florida. The opinions expressed by
the author are solely his own and do not
necessarily reflect those of Morgan Stanley.
The information and data in the article or
publication has been obtained from sources
believed to be accurate and Morgan Stanley
makes no representations or guarantees
as to the accuracy or completeness of infor-
mation or data. Neither the information
provided nor any opinion expressed consti-
tutes a solicitation by Morgan Stanley with
respect to the purchase or sale of any secu-
rity, investment, strategy or product that
may be mentioned.
© 2014 Morgan Stanley Smith Barney
LLC. Member SIPC.
DAVID H FOX
US stocks faced volatility
but losses were cut
People walk by an electronic stock board of a securities
firm in Tokyo, Thursday, September 25, 2014. Asian
stock markets were mostly higher Thursday after a
surge in new home sales in the US bolstered sentiment.
But gains were limited by worries about Europe's
stagnant economy and violence in Iraq and Syria. AP
Dow Jones Industrial Average
NASDAQ Composite Index
Crude oil Wti- Cushing
1.82 per cent 1.8 per cent
2.61 per cent 2.535 per cent
3.30 per cent 3.22 per cent
TOKYO---Japanese stocks dropped on Friday as steep
falls on Wall Street depressed risk appetite, though it
recovered from session lows as the government reiterated
its commitment to reform the nation's pension fund.
The Nikkei share average ended 0.9 per cent lower to
16,229.86, but was off a one-week trough hit in the
For the week, the benchmark has shed 0.6 per cent,
and is below a seven-year closing high hit on the previous
day. Japan's welfare minister said on Friday that he has
absolutely no intention to put off reforms for the country's
giant pension fund. Investors hope the reforms will see
some of the pension's large funds invested in stocks.
The broader Topix dropped 1.1 per cent to 1,331.95, and
the JPX-Nikkei Index 400 fell 1.1 per cent to 12,115.16.
Nikkei falls on Wall St
weakness, but pension
reform hopes limit losses
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