Home' Trinidad and Tobago Guardian : April 19th 2015 Contents Fear that Greece could default
and abandon the euro is rat-
tling global financial mar-
kets.News that negotiations
between Greece and its inter-
national lenders are making
little progress sent European
stock markets down sharply on Friday, and the
selling spread across the Atlantic. By the close
of US trading, stocks across industries were
lower, with four of five stocks down. Investors
shifted money into German government bonds,
a perceived haven in troubled times.
In the US, disappointing first-quarter finan-
cial results from several big companies fed the
selling. After American Express reported rev-
enue that fell short of expectations, investors
drove down its stock more than four per cent.
"The day of reckoning" for Greece is fast
approaching, said Uri Landesman, president
of investment fund Platinum Partners. "People
thought everyone would work it out, but if no
one caves, there won t be a deal."
For all the turmoil in the markets, major US
stock indexes closed the day with relatively
modest losses. At one point, the Dow Jones
industrial average was down 357, heading for
its worst day in six months. The Dow regained
some of those losses toward the close of trading,
ending down 279.47 to 17,826.30, a drop of 1.5
That was only the worst drop since March
25. The Dow has struggled since reaching a
record high on March 2 and is now back where
it started the year.
The Standard & Poor s 500 index lost 23.81
points, or 1.1 per cent, to 2,081.18. The Nasdaq
composite fell 75.98 points, or 1.5 per cent, to
Greece and its creditors are still struggling
to find a deal that can keep the country from
defaulting on its debt. The argument is over
what reforms Greece should make in return
for loans. Many think Greece will struggle to
make payments to the International Monetary
Fund due next month if it fails to reach a deal.
The concerns have caused investors to
demand higher rates for loaning money to
Greece s government. The yield on the country s
benchmark 10-year bond jumped to 12.72 per
cent Friday. That rate has more than doubled
from 5.51 per cent in September.
In corporate news, Honeywell International
fell US$2.22, or 2 per cent, to US$101.70 after
reporting disappointing first-quarter results.
The industrial conglomerate posted earnings
per share that beat estimates, but its revenue
Advanced Micro Devices plunged 10 per
cent after reporting a larger loss than investors
had expected after the market closed on Thurs-
day. The chipmaker s stock fell 29 cents to
Investors have been bracing themselves for
a disappointing earnings season. Companies
in the S&P 500 are expected to report earnings
per share fell 2.6 per cent from a year earlier,
according to S&P Capital IQ, a research firm.
That would be the first drop since 2009.
Jim Paulsen, chief investment strategist at
Wells Capital Management, said stocks are
now somewhat expensive compared with earn-
ings and, along with a list of other worries,
the news from Greece on Friday proved just
too much to bear.
"When you have more nervous investors,
news becomes magnified," he said.
Worrisome news out of China also weighed
on investors. After markets closed in Asia, Chi-
nese financial regulators issued warnings about
that country s soaring stock market. Regulators
said they will tighten rules on borrowing to
buy stocks. They also plan to make it easier
for investors to bet against the market there,
The Wall Street Journal reported. Shanghai s
stock market has more than doubled in the
"People are thinking maybe the party is over
in China," said Doug Cote, chief market strate-
gist for Voya Investment Management. "China
recognises that it could be creating a bubble,
and now it wants to slow down. It s trying to
rein back risk."
Germany s DAX index dropped 2.6 per cent.
France s CAC 40 shed 1.6 per cent and Britain s
FTSE 100 fell 0.9 per cent. Investors piled into
German government debt, which is perceived
as being among the safest investments denom-
inated in euros. Yields on Germany s 10-year
government note, which moves opposite to its
price, fell to 0.07 per cent, a record low, accord-
ing to Tradeweb.
The price of oil fell nearly 3 per cent Friday
on a slowdown in the reduction of working
drilling rigs, but finished the week sharply
higher. A closely watched industry count of
drilling rigs showed a decline of 26 US rigs for
the week, compared with a decline of 42 last
Benchmark US crude fell 97 cents to close
at US$55.74 a barrel in New York. US crude
finished up 8 per cent for the week, however.
Brent crude fell 53 cents to close at US$63.45
a barrel in London.
APRIL 19 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
How the Dow Jones industrial
average fared Friday
The Dow Jones industrial average fell
279.47 points, or 1.5 per cent, to 17,826.30.
The Standard & Poor's 500 index lost
23.81 points, or 1.1 per cent, to 2,081.18.
The Nasdaq composite fell 75.98 points, or
1.5 per cent, to 4,931.81.
For the week:
The Dow fell 231.35 points, or 1.3 per cent.
The S&P 500 index fell 20.88 points, or 1
The Nasdaq fell 64.16 points, or 1.3 per
For the year:
The Dow is up 3.23 points, less than 0.1
The S&P 500 index is up 22.28 points, or
1.1 per cent.
The Nasdaq is up 195.76 points, or 4.1 per
SEOUL, South Korea (AP) --- Global stock markets mostly fell on Friday amid concerns over Greece, while
stocks in mainland China extended gains on expectations of further policy easing.
KEEPING SCORE: European markets traded lower, with Britain s FTSE 100 down 0.7 per cent at 7,008.19
and France s CAC 40 shedding 1.2 per cent to 5,162.69. Germany s DAX was down 1.7 per cent at 11,793.37.
Futures showed that Wall Street was headed for weak open. S&P 500 futures were down 0.6 per cent and
Dow futures 0.7 per cent lower.
ASIA S DAY: Stocks in Shanghai continued their gains after data showed that China s economy grew at
the slowest pace since 2009 during the first quarter. The data stoked expectations that the country would
introduce further stimulus measures to achieve its annual growth target. The Shanghai Composite index
rose 2.2 per cent to 4,287.30 while South Korea s Kospi was up 0.2 per cent at 2,143.50. Hong Kong s Hang
Seng shed 0.3 per cent to 27,653.12. Japan s Nikkei 225 fell 1.2 per cent to 19,652.88, while Australia s S&P
ASX 200 was down 1.2 per cent at 5,877.90.
ENERGY: U.S. benchmark crude oil slipped 43 cents to US$56.28 per barrel in electronic trading on the
New York Mercantile Exchange. The contract rose 32 cents to settle at US$56.71 on Thursday, refreshing
its highest price this year.
CURRENCIES: The dollar weakened to 118.70 yen from 118.98 yen while the euro strengthened to
US$1.0809 from US$1.0770.
China up on stimulus hope
A man watches an electronic stock indicator of a securities firm in Tokyo Monday,
April 13, 2015. Asian stock markets were mostly higher Monday after weak
Chinese trade data increased expectations that Beijing will launch new stimulus.
Japan's benchmark Nikkei 225 was unchanged at 19,905.46 after briefly passing
20,000 last week.
A Nasdaq employee monitors prices at the Nasdaq MarketSite, Thursday, April 16, 2015, in New
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