Home' Trinidad and Tobago Guardian : January 4th 2015 Contents JANUARY 4 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
Stocks got off to a sluggish
start on the first day of
trading in the New Year,
ending the day mixed as
a report showed that
slowed in December.
US factory activity grew at the slowest pace
in six months last month, weakened by declines
in orders and production, according to the
Institute for Supply Management. While the
sector is still in good health, growth was slower
than economists had forecast.
The stock market climbed to record levels
at the end of 2014 and investors may now be
reassessing the outlook for the market at the
start of the year, said Brad McMillan, chief
investment officer for Commonwealth Finan-
cial, an independent broker-dealer firm. While
growth prospects in the US look decent, in
Europe and Asia they are less encouraging.
Investors are "stepping back and saying,
now we re in the New Year, let s take a fresh
look, " said McMillan. "There s certainly some
degree of, I wouldn t say pessimism, but read-
justment, going on."
The Standard & Poor s 500 index fell
0.70 points, or less than 0.1 per cent, to
2,058.20. The Dow Jones industrial aver-
age rose 9.92 points, or less than 0.1 per
cent, to 17,832.99. The Nasdaq composite
dropped 9.24 points, or 0.2 per cent, to
Stocks had another good year in 2014, but
the rally faded in the final days of the year.
The S&P 500 climbed 11.4 per cent, after rising
29.6 per cent in 2013. To justify those gains,
company earnings will have to keep growing.
"We don t think the US equity market is
going to do anywhere near as well this year"
as it has in recent years, said Dan Morris,
global investment strategist at TIAA-CREF,
an investment manager. "There s a lot more
that could go wrong than could go right in
Morris says stock investors should expect
returns in the single digits this year, and should
also brace themselves for higher levels of
volatility as the Federal Reserve moves toward
its first rate increase since 2006.
On Friday, stocks started out with solid
gains, then fell back after the ISM published
its manufacturing report. After drifting lower
for much of the afternoon, the market recov-
ered slightly and ended the day little changed.
US crude fell after moving between
losses and small gains. The price dropped
58 cents to US$52.69 a barrel in New York.
Brent crude, the international standard,
declined 91 cents to US$56.42.
Declining in oil prices are a boon to con-
sumers, who are paying less for gas, but they
hurts energy companies by lowering their rev-
enues. The energy industry accounts for about
10 per cent of earnings of companies in the
S&P 500 index.
The fall in prices will also mean that oil
companies will rein in spending on plants and
equipment, said Anastasia Amoroso, global
market strategist for JP Morgan Funds.
"The benefit of lower oil prices is incremental
to the damage that they inflict on other parts
of the economy," Amoroso said.
In currency trading, the euro retreated
against the dollar. The decline came after
European Central Bank President Mario Draghi
indicated that the bank could support a gov-
ernment bond-buying programme to combat
alarmingly low inflation in the eurozone. The
currency fell to US$1.2003, its lowest level
against the dollar in 4-1/2 years.
Investors have a number of concerns about
Europe as 2015 begins. Growth is anemic in
the region and an election in Greece on Jan.
25 could re-ignite the country s debt crisis if
an anti-austerity party wins.
In government bond trading, prices rose.
The yield on the 10-year Treasury note fell to
2.11 per cent from 2.17 per cent on Wednesday.
Markets were closed Thursday for the New
Year s Day holiday. The dollar also rose against
the Japanese yen, climbing 0.6 per cent to
In metals trading, gold edged up $2.10 to
$1,186.20 an ounce, silver rose 17 cents to
$15.77 an ounce and copper slipped less than
a penny to $2.82 a pound.
In other energy futures trading:
--- Wholesale gasoline dropped 3.9 cents
to US$1.433 per gallon.
--- Heating oil fell 3.8 cents to US$1.796
--- Natural gas rose 11.4 cents to
US$3.003 per 1,000 cubic feet. AP
drift lower amid
European stock markets
drifted lower Friday on the
first trading day of the New
Year as investors fretted
over the state of the eco-
nomic recovery in the 19-
country eurozone, a further
fall in the price of oil and the upcoming elec-
tion in Greece.
The euro was in retreat too after European
Central Bank President Mario Draghi indicated
the bank could soon back a further monetary
KEEPING SCORE: In Europe, France s
CAC 40 fell 0.4 per cent to 4,258 while Ger-
many s DAX fell 0.6 per cent to 9,748. The
FTSE 100 index of leading British shares was
down 0.4 per cent at 6,541. Wall Street was
set for gains, however, with Dow futures and
the broader S&P 500 futures up 0.3 per cent.
DRAGHI HITS EURO: The euro fell to
a 4 ½-year low against the dollar after Draghi
indicated the bank could soon back a gov-
ernment bond-buying program to deal with
alarmingly low inflation in the 19-country
eurozone. In an interview with the German
financial daily Handelsblatt, Draghi said the
risk the bank won t fulfill its mandate to keep
prices stable is greater now than it was six
For many, that s a clear hint from Draghi
that the bank stands ready to back a full-
blown bond-buying programme like the one
undertaken by the US Federal Reserve. Many
experts think the ECB could make the
announcement January 22 at its next mon-
etary policy meeting.
EUROPEAN CONCERNS: Traders in
Europe have a number of concerns as 2015
begins. As well as worrying about anemic
levels of economic growth in the eurozone
and lower oil prices, traders are concerned
that the election in Greece on January 25
may reignite the country s debt crisis if anti-
austerity parties form the next government,
as current opinion polls suggest.
ASIA SCORECARD: Hong Kong s Hang
Seng rose 1.1 per cent to 23,857.82 and South
Korea s Kospi added 0.6 per cent to 1,926.44.
Australia s S&P/ASX 200 gained 0.5 per cent
to 5,435.90. India s Sensex jumped 1.5 per
cent to 27,915.44. Markets in several countries
including Japan and China were closed for
New Year holidays. AP
Korea Exchange chairman
Choi Kyung-soo, left, and
South Korean Financial
Chairman Shin Je-yoon
beat bells during the
opening ceremony for the
Year 2015 trading at the
Korea Exchange in Seoul,
South Korea, Friday,
January 2, 2015. The Korea
Composite Stock Price
Index (KOSPI) started with
US stocks end mixed
The Dow Jones industrial average
rose 9.92 points, or 0.06 per cent, to
The Standard & Poor's 500 index
lost 0.70 points, or 0.03 per cent, to
The Nasdaq composite fell 9.24
points, or 0.2 per cent, to 4,726.81.
For the week:
The Dow is down 220.72 points,
or 1.2 per cent.
The S&P 500 is down 30.57
points, or 1.5 per cent.
The Nasdaq composite is down
80.05 points, or 1.7 per cent.
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