Home' Trinidad and Tobago Guardian : December 7th 2014 Contents DECEMBER 7 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCK | SBG11
US and Euro-
pean stocks Fri-
day, and left the
industrial average just short of the
The main focus in the markets
was the monthly hiring numbers.
The Labour Department said US
employers added 321,000 jobs last
month, the biggest burst of hiring
in nearly three years, while the
unemployment rate remained
steady at 5.8 per cent.
Despite the good news, stock
gains were restrained. Investors
now expect that the robust jobs
growth---and other signs the econ-
omy is accelerating---could lead the
Federal Reserve to raise interest
rates sooner than anticipated.
Banks, whose profit margins
increase when interest rates rise,
were among Friday s biggest gain-
ers. Safety-focused utility stocks,
which tend to perform poorly in
an improving economy, were
among the biggest decliners, along
with energy companies, which were
hurt once again by lower oil prices.
With Friday s modest increases, the
Standard & Poor s 500 index closed out
a seventh-straight week of gains. The
stretch was its longest winning streak
in a year and in stark contrast to the
near-correction in the market only a
"We continue to see this steady drip
into the equities markets, and I don t
think it s going to stop any time soon,"
said David Kelly, chief global strategist
for JP Morgan Funds.
The Dow Jones industrial average rose
58.69 points, or 0.3 per cent, to
17,958.79. The S&P 500 index climbed
3.45 points, or 0.2 per cent, to 2,075.37.
The Nasdaq composite gained 11.32
points, or 0.2 per cent, to 4,780.76.
November s jobs report, as well as
other positive economic data, could
raise expectations among investors that
the Federal Reserve will soon start raising
interest rates. Last month marks the
10th straight month of job gains above
200,000, and would put 2014 on track
to be the best year for hiring since 1999.
The yield on the benchmark 10-year
US Treasury note climbed to 2.31 per
cent Friday from 2.24 per cent the day
before as investors sold bonds in antic-
ipation of higher rates.
"The bottom line is this was yet
another very solid employment report
and another strong data point reaffirm-
ing the strength of US growth versus
a sluggish global (economy)," Rick Rieder,
chief investment officer of fundamental
fixed income at BlackRock, wrote in a
note to reporters.
Investors like seeing a healthy US
economy, but are also aware that stock
prices are higher partly because of ultra-
low interest rates. If the Fed believes
the US economy is overheating, they
could raise interest rates and it could
cause stock prices to decline.
Not all stocks would be losers in a
higher interest rate environment. Bank
stocks rose Friday, with JPMorgan Chase,
Citigroup, Bank of America, and Wells
Fargo up 1.0 per cent to 2.5 per cent.
Higher interest rates would allow banks
to charge more for loans and that would
boost their profits.
Still, those gains weren t enough to
push the Dow to another round-number
landmark. Just five months after cresting
the 17,000-point level for the first time,
the Dow is on the verge of 18,000. The
blue chips came within nine points of
that figure Friday, before pulling back.
Still, the Dow s performance this year
has trailed the other major indexes. The
average is up 8.3 per cent in 2014, while
the S&P 500, which is tracked more by
mutual funds and Wall Street, is up 12.3
per cent. The Nasdaq is up the most,
rising 14.5 per cent.
The price of oil fell Friday to its lowest
level since July of 2009 on continued
expectations of high global supplies and
Saudi Arabia s decision to cut its prices.
Benchmark US crude fell 97 cents to
close at US$65.84 a barrel in New York.
Brent crude, a benchmark for interna-
tional oils used by many US refineries,
fell for the ninth time in the last 10
trading sessions, closing down 57 cents
to US$69.07 in London.
Energy stocks followed oil prices
lower. Chevron fell US$1.41, or 1.3 per
cent, to US$110.87. Marathon Petroleum
lost US$4.52, or 4.7 per cent, to US$92.15
and Phillips 66 fell US$1.95, or 2.6 per
cent, to US$73.02.
Along with the improving economy,
the drop in oil prices has been encour-
aging to investors. Lower oil prices and,
in turn, falling gas prices, are effectively
a tax cut for the average person, and it
could translate into higher spending
down the road.
The dollar rose against other curren-
cies as traders anticipated more robust
growth in the US and higher interest
The price of gold fell US$17.30, or 1.4
per cent, to US$1,190.40 an ounce.
Silver fell 32 cents, or 1.9 per cent, to
US$16.26 an ounce. Copper slipped a
penny to US$2.90 a pound. AP
Specialist Charles Solomon works at
his post on the floor of the New York
Stock Exchange, Friday, December 5,
2014. US stocks finished modestly
higher after the government reported
a surge in hiring last month. AP
The Dow Jones industrial aver-
age rose 58.69 points, or 0.3 per
cent, to 17,958.79.
The Standard & Poor's 500 index
added 3.45 points, or 0.2 per
cent, to 2,075.37.
The Nasdaq composite rose 11.32
points, or 0.2 per cent, to
For the week:
The Dow is up 130.55 points, or
0.7 per cent.
The S&P 500 is up 7.81 points, or
0.4 per cent.
The Nasdaq is down 10.87
points, or 0.2 per cent.
For the year:
The Dow is up 1,382.13 points, or
8.3 per cent.
The S&P 500 index is up 227.01
points, or 12.3 per cent.
The Nasdaq is up 604.17 points,
or 14.5 per cent.
Stocks rise after hiring
surge; Dow misses 18,000
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