Home' Trinidad and Tobago Guardian : September 27th 2015 Contents SEPTEMBER 27 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
A late slump in health care stocks pushed
the market to its third weekly loss this month.
US stocks had traded solidly higher for most
of the day, as banks, insurance companies and
brokerage firms climbed after Federal Reserve
Chair Janet Yellen said that the policymakers
would likely raise interest rates this year. The
market gave up its most of its gains in the
afternoon as a sell-off in drugmakers led the
health care sector lower.
The stock market has been volatile for the
past six weeks on worries about the impact
of slowing growth in China and other emerging
markets, as well as uncertainty about the out-
look for interest rates. The late sell-off on
Friday pushed stocks to their third losing week
in the last four.
"This is a dangerous market that is still
looking for direction," said Jerry Braakman,
Chief Investment Officer at First American
Trust an investment management firm.
"Although the US is continuing to improve,
outside the US, it's just scary."
The Standard & Poor's 500 index fell 0.9
points, or less than 0.1 per cent, to 1,931.34.
The Dow Jones industrial average gained 113.35
points, or 0.7 per cent, to 16,314.67. The Nasdaq
composite fell 47.98 points, or 1 per cent, to
The S&P 500 closed down 1.4 per cent for
the week, the Dow was 0.4 per cent lower.
Shares of drugmakers began their slide on
Monday when Democratic presidential front-
runner Hillary Rodham Clinton pledged to
stop "price gouging" in the industry. The health
care sector, a longtime favorite of investors,
ended the week with its worst weekly per-
formance in more than four years.
Biotechnology shares in the S&P 500
dropped plunged during the week, pushing
the overall health care index down 5.8 percent,
its worst week since August 2011. Vertex Phar-
maceuticals, which focuses on developing
drugs for cystic fibrosis and viral infections,
was the biggest decliner in the index on Friday,
dropping $7.83, or 7 per cent, to $103.20.
The market had started the day with solid
gains as investors were encouraged by a report
that showed US economic growth was faster
in the spring than previously estimated.
The US economy expanded at an annual
rate of 3.9 percent in the April-June quarter,
up from a previous estimate of 3.7 per cent,
the Commerce Department reported Friday.
The strength came from gains in consumer
spending, business investment and residential
Financial companies got a boost after Federal
Reserve Chair Janet Yellen said that the central
bank was still likely to raise interest rates this
year. She suggested global economic weakness
won't be significant enough to alter the central
bank's plan to raise its key short-term rate
from zero by December. Record low interest
rates since the 2008 global financial crisis have
been a boon for stocks, underpinning a bull
market that has run for six and a half years.
The combination of higher rates and a grow-
ing economy is good for financial companies.
That's because they can earn more from mak-
ing loans. Citigroup rose $1.42, or 2.9 per cent,
to $50.55 and Bank of America climbed 34
cents, or 2.2 per cent, to $15.89.
"The financials are a wonderful place to be
over the next several quarters if a rate rises
materializes," said Jim Russell, a portfolio
manager at Bahl & Gaynor Investment Coun-
sel.Nike was biggest gainer in the S&P 500 on
Friday. The stock soared after the company's
earnings surpassed analyst expectations. Nike
climbed US$10.21, or 8.9 per cent, to $125.
Volkswagen shares fell again. The company
named Matthias Mueller, the head of the
group's Porsche unit, to be the new CEO. His
predecessor Martin Winterkorn quit the job
this week over the emissions scandal, which
has tarnished the company's reputation. VW
shares ended down 2.8 per cent on Friday and
dropped almost 30 per cent for the week.
U.S. government bond prices fell. The yield
on the benchmark 10-year Treasury note rose
to 2.16 per cent from 2.13 per cent late Thurs-
The euro rose to US$1.1194 while the dollar
edged up to 120.60 yen.
In metals trading, gold closed US$8.20 lower
at US$1,145.60 an ounce. Silver edged lower,
dropping 1.9 cents to US$15.11 and copper fell
1.9 cents to US$2.28 per pound.
The price of oil rose Friday as the number
of rigs drilling for oil in the US fell for the
fourth straight week, according to a closely
watched industry count. US crude rose 79
cents to close at US$45.70 a barrel in New
York, ending a choppy week of trading up 2.3
per cent. Brent Crude, a benchmark for inter-
national oils used by many U.S. refineries,
rose 43 cents to close at US$48.60 a barrel in
In other futures trading on the NYMEX:
--- Wholesale gasoline rose 3.1 cents to close
at US$1.396 a gallon.
--- Heating oil fell 0.1 cent to close at
US$1.523 a gallon.
--- Natural gas fell 2.7 cents to close at
US$2.564 per 1,000 cubic feet.
Late slump in health care
pushes stocks to weekly loss
How the Dow Jones industrial
average fared on Friday
Stocks ended mixed on Friday after a
late slump in health care stocks offset
gains in financial shares. Banks and
other financial companies got a boost
after Federal Reserve Chair Janet Yellen
said that the central bank was still likely
to raise interest rates this year.
Drugmakers fell on worries about new
The Dow Jones industrial average
rose 113.35 points, or 0.7 per cent, to
The Standard & Poor's 500 index fell
0.9 points, or less than 0.1 per cent, to
finish at 1,931.34.
The Nasdaq composite fell 47.98
points, or 1 per cent, to 4,686.50.
For the week:
The Dow is down 69.91 points, or 0.4
The S&P 500 index is down 26.69
points, or 1.4 per cent.
The Nasdaq is down 140.73 points, or
2.9 per cent.
For the year:
The Dow is down 1,508.40 points, or
8.5 per cent.
The S&P 500 index is down 127.56
points, or 6.2 per cent.
The Nasdaq is down 49.56 points, or
less than 1.1 per cent.
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