Home' Trinidad and Tobago Guardian : April 5th 2015 Contents APRIL 5 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
Major US stock
slightly higher on
a two-day slide
looked ahead to
the start of the next round of corporate earnings
beginning next week.
Traders drew encouragement from the latest
economic data, particularly a government
report indicating a steep drop in applications
for unemployment benefits last week. That
appeared to reassure investors that the gov-
ernment will report solid job growth for March.
"There is a little bit of an expectation that
the jobs number will come in good," said JJ
Kinahan, TD Ameritrade s chief strategist.
That report is due out Friday, when markets
will be closed for Good Friday.
Consumer discretionary stocks were among
the biggest risers. The price of oil fell back
below US$50 a barrel after the US, five other
world powers and Iran reached an agreement
that could soon lift sanctions on Iran and allow
the country to export more crude.
The Dow Jones industrial average gained
65.06 points, or 0.4 per cent, to 17,763.24.
The 30-company index is down 0.3 per cent
for the year.
The S&P 500 index rose 7.27 points, or 0.4
per cent, to 2,066.96. The index is now up
0.4 per cent for the year.
The Nasdaq composite added 6.71 points,
or 0.1 per cent, to 4,886.94. The tech-heavy
index ended is up about 3.2 per cent this year.
Trading got off to a turbulent start. Major
indexes briefly turned lower at midday before
moving higher, a trend that held the rest of
Investors have been weighing mixed eco-
nomic data as they try to gauge how corporate
earnings will unfold in coming weeks.
Earlier in the week, they got a dash of pos-
itive data on consumer confidence, spending
and home prices, but also discouraging reports
on hiring, construction spending and man-
Thursday s economic data gave investors
more reasons to be optimistic.
The Labor Department said applications for
unemployment benefits fell sharply last week
to a seasonally adjusted 268,000. The decrease
is a sign of a strong job market despite evidence
of tepid economic growth in the opening
months of 2015.
The four-week trend continues to go in the
right direction, noted Tim Dreiling, senior
portfolio manager at US Bank Wealth Man-
New data on US factory orders also helped
lift the market. The Commerce Department
said orders edged up 0.2 per cent in February,
breaking a six-month losing streak. Excluding
volatile transportation orders, factory orders
rose 0.8 per cent, the most since June.
Meanwhile, the Commerce Department said
that the nation s trade deficit plunged 16.9
per cent to US$35.4 billion in February.
Financial analysts anticipate the Labor
Department will report Friday that employers
added 248,000 jobs last month, according to
FactSet. Employers added 295,000 jobs in
Earnings for companies in the S&P 500
index are expected to be down three per cent
overall, according to S&P Capital IQ. That
would be the first decline in quarterly earnings
since the third quarter of 2009, the firm said.
Investors have reduced their expectations
for corporate earnings due to concerns over
the impact that falling oil prices and a strong
dollar may have on big companies.
All told, nine of the 10 sectors in the S&P
500 rose, led by consumer discretionary stocks.
The sector also leads the index for the year
with a gain of 4.8 per cent.
CarMax climbed 9.3 per cent after the deal-
ership operator said that its profit rose sharply
in the latest quarter as purchases of used vehi-
cles increased. The stock climbed the most
out of all the stocks in the S&P 500 index,
adding US$6.34 to US$74.73.
US government bond prices fell. The yield
on the 10-year Treasury note rose to 1.91 per
cent from 1.86 per cent late Wednesday.
The slide in crude oil deepened. Benchmark
US crude fell 95 cents to close at US$49.14
a barrel in New York. Brent crude, a benchmark
for international oils used by many US refiner-
ies, fell US$2.15 to close at US$54.95 in Lon-
In other futures trading on the NYMEX,
wholesale gasoline fell 7 cents to close at
US$1.761 a gallon, while heating oil fell 6.4
cents to close at US$1.683 a gallon. Natural
gas rose 10.8 cents to close at US$2.713 per
1,000 cubic feet.
In metals trading, gold fell US$7.30 to
US$1,200.90 an ounce, silver fell 36 cents to
US$16.70 an ounce and copper edged down
a penny to US$2.73 a pound.
Among stocks making big moves Thurs-
• Sequential Brands Group surged 12.6 per
cent on news that the brand management and
licensing company will buy a majority stake
in Jessica Simpson s clothing, apparel and
accessories brand. The stock rose US$1.34 to
• Repros Therapeutics climbed 4.6 per cent
after the company said that the Food and Drug
Administration accepted its application seeking
approval for a testosterone drug. Repros added
39 cents to US$8.88.
The official account of the European Central Bank s last
policy meeting show top officials expressing determination to
stick with the full 1.1 trillion euros (US$1.2 trillion) of their
planned stimulus; even though the 19-country eurozone econ-
omy shows signs of finally picking up.
Minutes to the March 5 meeting of the bank s governing
council in Nicosia, Cyprus released Thursday showed that all
the members agreed there was no room for complacency.Ltd
Members stressed that the stimulus, which involves the
monthly purchase of 60 billion euros worth of government
and corporate bonds with newly created money through Sep-
tember 2016, had to be fully implemented and supported by
appropriate communication. The purchases started March 9.
The bank s intentions have a significant impact on a wide
array of people; from stock and bond investors to European
exporters, US corporations and consumers.
The stimulus---at a time when the US Federal Reserve is
preparing to move in the opposite direction by possibly raising
interest rates this year---has sent the euro plunging against
That helps eurozone exporters but has burdened earnings
for US corporations that do business in Europe. The stimulus
has also helped shore up European stock markets as well as
The ECB is the top monetary authority for the countries
that share the euro currency, known as the eurozone.
The 25 governing council members---who are not mentioned
by name in the written summary of their discussion but include
ECB President Mario Draghi---felt there were grounds for pru-
But they warned that their own improved economic forecasts
for this year and next are based on the assumption that the
bank will execute the full amount of the planned purchases,
and continue them beyond September 2016 if needed.
They said that their forecast of 1.5 per cent growth this year
and 1.9 per cent next should therefore not be interpreted as
suggesting that the latest monetary policy measures were less
The ECB is trying to raise worrisome low inflation and stim-
ulate growth to reduce high unemployment. The bond purchases
inject new money into the financial system and the econo-
my---which can raise inflation---and have driven down already
low borrowing costs for companies, individuals and govern-
The economy, which grew 0.3 per cent in the third quarter
of last year, has been boosted by low oil prices that leave more
money for consumers to spend, and by a sharply weaker euro
that helps exporters. Economic indicators show business activity
picking up and unemployment has eased slightly but remains
high at 11.3 per cent.
European Central Bank determined to stick with stimulus plan
Trader Frederick Reimer works on the floor of the New York Stock Exchange, Wednesday, April
1, 2015. US stocks moved lower in early trading Wednesday, extending losses from the day
before. A report indicating that US businesses slowed their pace of hiring last month weighed
on the market. AP
US stocks edge
higher after two
days of losses
How the Dow Jones industrial
average fared Thursday
The Dow Jones industrial average rose
65.06 points, or 0.4 per cent, to 17,763.24.
The S&P 500 index gained 7.27 points, or
0.4 per cent, to 2,066.96.
The Nasdaq composite added 6.71 points,
or 0.1 per cent, to 4,886.94.
For the week:
The Dow is up 50.58 points, or 0.3 per
The S&P 500 index is up 5.94 points, or
0.3 per cent.
The Nasdaq is down 4.28 points, or 0.1
For the year:
The Dow is down 59.83 points, or 0.3 per
The S&P 500 index is up 8.06 points, or
0.4 per cent.
The Nasdaq is up 150.88 points, or 3.2 per
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