Home' Trinidad and Tobago Guardian : September 20th 2015 Contents Fears over slowing global growth
hammered stocks in the US and
Europe on Friday and lifted
prices of government bonds
and other assets seen as safer
The selling pushed down major stock indexes
in Germany, France and Britain before spreading
to the US. The Standard and Poor s 500 index
slumped to its biggest loss in more than two
weeks as all 10 industry sectors of the broad
market gauge fell. Energy companies dropped
the most as oil plunged.
The stock sell-off came a day after the Fed-
eral Reserve decided to hold interest rates near
zero. That means borrowing costs will remain
low for a while yet, a prospect that has in the
past typically boosted stocks. But some
investors, expecting the Fed would be confident
enough to nudge rates up by at least a quarter
of a point, interpreted the stance as a sign
that the global economy is dangerously weak.
"If growth in the strongest economy---the
United States---isn t strong enough to raise
rates even a quarter of a point, what does that
say about the prospects for global growth?"
said Bill Strazzullo, chief strategist at market
research firm Bell Curve Trading.
The Fed has kept its benchmark rate close
to zero for almost seven years. In that time,
U.S. stocks have nearly tripled from their finan-
cial crisis low. The Fed meets again next month
and in December.
The Dow Jones industrial average ended
down 289.95 points, or 1.7 per cent, to
16,384.79. The S&P 500 slumped 32.12 points,
or 1.6 per cent, to 1,958.08 and the Nasdaq
composite shed 66.72 points, or 1.4 per cent,
Bonds rallied as investors sought safety. The
benchmark 10-year Treasury note gained,
pushing down its yield to 2.13 per cent. Gold
A gauge of investor fear, the VIX index, shot
up 7 per cent to 23. In early July, this measure
of expected swings in stock prices was 12.
In its rate decision Thursday, the Fed cited
low inflation, weakness in the global economy
and unsettled financial markets. Investors have
been on edge about a slowdown in China and
other emerging market nations since last
month. The S&P 500 index is down about
eight per cent from its record close of 2,130.82
set in May.
UBS strategist Julian Emanuel said a mix
of other factors may have also fed the selling
Investors are worried about third-quarter
corporate earnings, which are forecast to drop
4 per cent for companies in the S&P 500.
Also, several dozen House Republicans have
said they won t vote for a funding bill that
includes money for Planned Parenthood, raising
the specter of a government shutdown next
"When you add up the Fed, China, the
cloudy earnings outlook and, and possibly of
government shutdown, it s not a surprise that
the market has had a defensive reaction,"
In Europe, Germany s DAX fell 3.1 per cent
while the CAC-40 in France dropped 2.6 per
cent. Britain s FTSE 100 ended the day 1.3 per
Among US stocks making big moves, JPMor-
gan Chase fell US$1.71, or 2.7 per cent, to
US$60.94 as investors judged that lower inter-
est rates for longer mean banks won t be able
charge more for loans. Citigroup slumped
US$1.36, or 2.6 per cent, US$50.29.
La Quinta plunged US$2.92, or 15 per cent,
to US$16.05 after the hotel company
announced late Thursday that its CEO Wayne
Goldberg had stepped down after almost a
decade in charge. The company also lowered
its 2015 sales forecast due to weak demand in
August and September.
In metals trading, the price of gold rose
US$20.80 to US$1,137 an ounce. Silver climbed
17.9 cents to US$15.16 an ounce and Copper
fell 6.6 cents to US$2.39 per pound.
The price of oil plunged over concerns that
demand for crude could weaken if the global
economy slows. US oil dropped US$2.22, or
4.7 per cent, to US$44.68 per barrel. Brent
crude, the global benchmark, fell US$1.61, or
3.3 per cent, to US$47.47 per barrel in Lon-
In other energy futures trading:
• Wholesale gasoline fell 2 cents to US$1.356
•Heating oil slipped 3.9 cents to US$1.491
• Natural gas fell 4.7 cents to US$2.605 per
1,000 cubic feet.
SEPTEMBER 20 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
KEEPING SCORE: Japan s bench-
mark Nikkei 225 slipped 1.3 per cent to
18,187.55 in morning trading, as the
dollar weakened against the yen, send-
ing export issues lower. But South
Korea s Kospi added nearly 1 per cent
Hong Kong s Hang Seng was up 0.4
per cent to 21,949.63. The Shanghai
Composite Index rose 0.1 per cent to
3,089.39. Other regional markets were
also moderately higher, rising in Taiwan,
Singapore, Indonesia and the Philip-
pines. Australia s S&P/ASX 200 rose
0.8 per cent to 5,186.90.
THE FED: The Federal Reserve
decided Thursday to keep interest rates
at record lows for now, citing weakness
in the global economy and unsettled
financial markets. But Fed Chair Janet
Yellen indicated a rate hike is still likely
this year. The Fed meets again next
month and in December.
ENERGY: Benchmark U.S. crude
was down 13 cents at US$46.77 a barrel
in electronic trading on the New York
Mercantile Exchange. The contract fell
25 cents to US$46.90 a barrel in New
York on Thursday.
Brent crude, a benchmark for inter-
national oils, rose 7 cents to US$49.93
a barrel after falling 67 cents to
US$49.08 the previous day.
CURRENCIES: The euro slipped to
US$1.396 from US$1.1399. The dollar
weakened to 119.94 yen from 120.37
Asian stocks perked by Fed holding off on interest rate hike
Specialist Peter Giacchi, right, works at his post that handles Madison Square Garden on the
floor of the New York Stock Exchange, Thursday, September 17, 2015. US stocks are edging
mostly lower in early trading as investors wait for news about interest rates from the Federal
working at the
dealing room of
the KEB Hana
2015. Asian stocks
perked by relief
that the US
held off on raising
interest rates for
the time being. AP
How the Dow Jones industrial
average fared on Friday
The Dow Jones industrial average fell
290.16 points, or 1.7 per cent, to
The Standard & Poor's 500 index
slumped 32.17 points, or 1.6 per cent, to
The Nasdaq composite shed 66.72
points, or 1.4 per cent, to 4,827.23.
For the week:
The Dow is down 48.51 points, or 0.3
The S&P 500 index is down 3.02
points, or 0.2 per cent.
The Nasdaq is up 4.89 points, or 0.1
For the year:
The Dow is down 1,438.49 points, or
8.1 per cent.
The S&P 500 index is down 100.87
points, or 4.9 per cent.
The Nasdaq is up 91.17 points, or 1.9
US stocks fall
Fed's rate decision
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