Home' Trinidad and Tobago Guardian : November 15th 2015 Contents NOVEMBER 15 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
The stock market slumped to
its second-biggest weekly loss
of the year Friday, breaking a
streak of six consecutive weeks
of gains. Fears that the holiday
shopping season will be a dud
tanked retail stocks.
Retailers ranging from department stores
to dollar stores plunged after Nordstrom posted
disappointing third-quarter results, just as
Macy s did earlier this week.
The price of oil continued to slide on evi-
dence that global supplies are still rising. The
dollar could get even stronger, further pres-
suring oil and other commodities and affecting
mining and energy companies.
The Dow Jones industrial average fell 202.83
points, or 1.2 per cent, to 17,245.24. The Stan-
dard & Poor s 500 gave up 22.93 points, or 1.1
per cent, to 2,023.04. The Nasdaq composite
index slipped 77.20 points, or 1.5 per cent, to
Concerns about retail sales and skidding
commodities prices have eroded the gains
from October s big stock market rally. Stocks
have now lost ground seven of the last eight
days. Overall the S&P 500 is down almost 2
per cent for the year.
Nordstrom sank US$9.51, or 15 per cent, to
US$53.96 after reporting weaker sales. The
company also cut its forecast for the year.
Macy s had done the same on Wednesday.
The holiday shopping rush will kick into
high gear with Black Friday in two weeks. Fol-
lowing several weak reports from retailers,
investors are becoming worried that sales will
be poor during that period, which is a crucial
moneymaker for retail companies. Macy s and
Nordstrom both hit two-year lows Friday.
Consumer discretionary stocks were by far
the worst performing group in the S&P 500.
JC Penney s results were about equal to ana-
lyst projections, but its stock lost US$1.35, or
15.4 per cent, to US$7.44. Video game retailer
GameStop sank US$7.35, or 16.5 per cent, to
US$37.18. Watchmaker Fossil Group plunged
US$18.62, or 36.5 per cent, to US$32.39. Fossil
posted disappointing earnings Thursday after-
noon and also said it will buy activity tracker
maker Misfit for US$260 million. Its shares
hit their lowest level in five years.
Compounding those worries was a govern-
ment report showing that US retail spending
edged up just 0.1 per cent in October, a bit
less than analysts expected. Prices charged by
farmers, manufacturers and other producers
fell in October. The figures show there is little
sign of inflation in the US economy. When
inflation is higher, consumers have an incentive
to spend more money.
Stifel Nicolaus analyst Richard Jaffe sug-
gested the widespread selling was an overre-
action. Shoppers will spend plenty of money
this holiday season, he said, and while they re
spending more money on smartphones and
TVs and other big items than they used to,
there will still be plenty of socks and sweaters
given as gifts over the holidays.
"Christmas is boxed gifts," Jaffe said. "There
will be a lot of gift giving, a lot of apparel
Jaffe noted that Americans shopping habits
have changed a lot over the last few years.
Consumers are spending more on homes, cars,
and vacations. Aging baby boomers don t buy
clothes as often as they used to, and younger
shoppers are more interested in technology.
The price of oil continued to fall after the
International Energy Agency said commercial
inventories reached almost three billion barrels
at the end of September, a record. The IEA
also said growth in global demand will slow
down next year. Oil prices have dropped
because demand can t keep up with ever-
increasing supplies. The strong dollar makes
dollar-denominated commodities costlier to
buyers using yen, euro and other currencies.
US crude slumped US$1.01, or 2.4 per cent,
to US$40.74 a barrel in New York. It s dropped
about 13 per cent this month and is at its
lowest price since late August. Brent crude,
which is used to price international oils, lost
45 cents, or one per cent, to US$43.61 a barrel
Jim Ritterbusch of the oil trading firm Rit-
terbusch & Associates said crude could fall
another US$3 to US$4 a barrel. It s gone as
low as US$37.75 this year.
In other energy trading, heating oil fell 2.5
cents to US$1.381 a gallon. Wholesale gasoline
dipped 3.4 cents to US$1.239 a gallon. Natural
gas edged up 10.1 cents to US$2.361 per 1,000
The price of gold fell 10 cents to US$1,080.90
an ounce. Silver fell for the tenth day in a row,
losing 2.1 cents to US$14.20 an ounce. Copper
dipped slightly to just under US$2.17 a pound.
All three metals are at their lowest levels in
Generic drugmaker Mylan climbed after a
long pursuit of Irish drugmaker Perrigo came
to an end. Perrigo s shareholders rejected a
US$26 billion offer from Mylan, an offer Perrigo
had called inadequate. Mylan logged the biggest
gain on the S&P 500, adding US$5.58, or 12.9
per cent, to US$48.78. Perrigo fell US$9.65,
or 6.2 per cent, to US$146.90.
US government bond prices rose. The yield
on the 10-year Treasury note slipped to 2.27
per cent from 2.31 per cent. The euro declined
to US$1.0751 from US$1.0791 and the dollar
edged up to US$122.67 yen from 122.62 yen.
How the Dow Jones industrial
average fared on Friday
The Dow Jones industrial average fell
202.83 points, or 1.2 per cent, to 17,245.24.
The Standard & Poor's 500 index gave up
22.93 points, or 1.1 per cent, to 2,023.04.
The Nasdaq composite index slipped 77.20
points, or 1.5 per cent, to 4,927.88.
For the week:
The Dow skidded 665.09 points, or 3.7 per
The S&P 500 retreated 76.16 points, or 3.6
The Nasdaq gave up 219.24 points, or 4.3
For the year:
The Dow is down 577.83 points, or 3.2 per
The S&P is down 35.86 points, or 1.7 per
The Nasdaq is up 191.83 points, or 4.1 per
Asian stocks slid Friday following sharp
losses on Wall Street as a slump in commodi-
ties markets deterred investors from riskier
assets and expectations grew that the US
would soon move to raise interest rates.
KEEPING SCORE: Japan s benchmark
Nikkei 225 index fell 0.8 per cent to 19,534.97
while South Korea s Kospi shed 0.8 per cent
to 1,976.88. Hong Kong s Hang Seng slumped
1.9 per cent to 22,454.66 while the Shanghai
Composite Index in mainland China retreated
0.5 per cent to 3,614.57. Australia s S&P/ASX
200 declined 1.7 per cent to 5,039.30. Bench-
marks in Taiwan, Singapore, the Philippines
and New Zealand also fell.
COMMODITY CRUNCH: A deepening
slump in oil, metals and other commodities
was putting investors off. Copper prices are
down 23 per cent this year while crude oil
futures fell 2.7 per cent on Thursday.
Prices for the raw materials, which are
priced in dollars, were looking less attractive
as the Fed readies for a rate hike while the
European and Japanese central bank look set
to keep their rates low and consider rolling
out more stimulus measures.
ENERGY: Benchmark US oil futures fell
21 cents to US$41.54 a barrel in electronic
trading on the New York Mercantile Exchange
after the US government said crude stockpiles
grew by 4.2 million barrels last week.
The contract lost US$1.18, or 2.7 per cent,
to settle at US$41.75 a barrel on Thursday.
Brent crude, which is used to price interna-
tional oils, was flat at US$45.19 a barrel in
CURRENCIES: The euro inched up to
US$1.0787 from US$1.0776 in the previous
day s trading. The yen slipped to US$122.66
from 122.89. AP
Asian stocks slump on Fed rate hike fears, commodity rout
People walk by an electronic stock board of a securities firm in Tokyo, Friday, November 13,
2015. Asian stocks slid Friday following sharp losses on Wall Street as a slump in commodities
markets deterred investors from riskier assets and expectations grew that the US would soon
move to raise interest rates. AP
US stocks see red Friday in
second-worst week of year
Trader Gregory Rowe, left, works on the floor
of the New York Stock Exchange, Friday,
November 13, 2015. Sharp declines in retailers
were dragging the stock market lower in
early trading as investors worry that holiday
sales could slump. (AP)
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