Home' Trinidad and Tobago Guardian : December 14th 2014 Contents Arout in oil prices shook
financial markets Fri-
day, pushing stocks to
their worst weekly loss
in two and a half years.
The stock market fell
sharply as investors
worried that slumping
oil demand is signaling that growth outside
of the US is weaker than earlier thought. And
while consumers and airlines will benefit from
lower fuel prices, energy companies will see
their earnings suffer. Some may even go out
"In a nation like the US (as well as) Europe
and most of Asia, the benefits of falling oil
outweigh the costs," said Jeff Kleintop,
Schwab's chief global investment strategist.
"The concern is that there's something more
to it, given such a sharp decline, that there's
something deeper here."
The Standard & Poor's 500 index fell 33
points, or 1.6 per cent, to 2,002.33. The index
dropped 3.5 per cent over the week, its biggest
decline since May 2012. US benchmark oil
slipped US$2.14 Friday, or 3.6 percent, to
US$57.81 a barrel. Energy stocks in the S&P
500 index fell 2.1 per cent, taking their loss
for the year to 16.5 percent.
The Dow Jones industrial average dropped
315.51 points, or 1.8 per cent, to 17,280.83. The
Nasdaq composite dropped 54.57 points, or
1.2 percent, to 4,653.60.
Just seven days earlier, the market hit record
levels on the back of a strong employment
report. After flirting with a close above 18,000
a week ago, the Dow has now shed more than
700 points, partly because of big losses for
Exxon Mobil and Chevron.
A rapid decline in crude hit stocks all week.
Oil fell again Friday after the International
Energy Agency said global demand grow less
than previously forecast next year.
The news drove crude down for the fourth
day in five, leaving the price 12 per cent lower
for the week and well below US$60 per barrel.
Oil has now fallen 47 per cent since reaching
a peak of US$107 in June this year.
The last time oil prices were this low was
when the US economy was emerging from
the Great Recession.
"It looks as if oil is not through going down
yet," said Jim Russell, a portfolio manager at
Bahl and Gaynor, a wealth manager. "It's a
concern for the market because it does signal
probably some global growth weakness."
Stocks were also hurt after a report showed
that growth in factory output in China, the
world's second-largest economy, declined last
The data came after Chinese leaders affirmed
their commitment to the "new normal" of
slower growth as they try to steer China toward
a more sustainable expansion based on domes-
On Friday, some companies bucked the
Adobe reported fourth-quarter results late
Thursday that beat Wall Street expectations.
Adobe also said it will pay US$800 million to
buy the stock image and video company Foto-
lia. The stock jumped $6.28, or 9 per cent, to
Stock investors may face more volatility this
week when the Federal Reserve starts a two-
day meeting. Many expect that policymakers
will signal that they are moving closer to raising
interest rates for the first time in more than
eight years as the economy continues to
"The biggest event next week is clearly going
to be the Fed meeting," said James Liu, global
market strategist for JP Morgan Funds.
A bull run for stocks that has lasted for
nearly six years has come against a backdrop
of economic stimulus from the Fed. Some
investors worry that the market will give up
some its gains once interest rates start to rise.
Government bond prices rose. The yield on
the benchmark 10-year Treasury note, which
falls when prices rise, dropped to 2.08 per
cent from 2.17 per cent Thursday.
The dollar fell. The US currency dropped
0.2 per cent to 118.74 yen. The euro rose 0.5
per cent against the dollar to US$1.24593.
In metals trading, silver fell six cents, or 0.3
per cent, to US$17.06 an ounce. Gold dropped
$3.10, or 0.3 per cent, to US$1,222.50 an ounce.
Copper rose a penny, or 0.4 per cent, to
US$2.93 a pound.
In other energy trading, Brent crude, the
international benchmark, lost US$1.83, or 2.9
per cent, to US$61.85 a barrel in London.
DECEMEBER 14 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
NEWS | SBG9
US stocks plunge
as oil rout continues
On the NYMEX:
--- Wholesale gasoline fell 2.7 cents to
close at US$1.597 a gallon.
--- Heating oil fell 4.5 cents to close at
US$2.016 a gallon.
--- Natural gas rose 16.1 cents to close
at US$3.795 per 1,000 cubic feet.
U.S. stocks plunged Friday as the rout
in oil continued and a report indicated
that growth in China, the world's sec-
ond-largest economy, continues to
slow. The market had its biggest
weekly decline since May 2012.
The Dow Jones industrial average
dropped 315.51 points, or 1.8 per cent,
The Standard & Poor's 500 index fell
33 points, or 1.6 per cent, to 2,002.33.
The Nasdaq composite declined 54.57
points, or 1.2 per cent, to 4,653.60.
For the week:
The Dow is down 677.96 points, or 3.8
The S&P 500 is down 73.04 points, or
3.5 per cent.
The Nasdaq is down 127.16 points, or
2.7 per cent.
For the year:
The Dow is up 704.17 points, or 4.3
The S&P 500 index is up 153.97
points, or 8.3 per cent.
The Nasdaq is up 477.01 points, or
11.4 per cent.
Traders Peter Tuchman, right, and Kevin Lodewick on the floor of the New York Stock Exchange on Friday as US stocks ended the week sharply
lower as the rout in oil continues and a report indicated that growth in China, the world's second-largest economy, continues to slow.
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