Home' Trinidad and Tobago Guardian : January 10th 2015 Contents Awave of late selling pum-
meled US stocks Friday and
pushed the market to its
worst week in four years.
The dismal start to the new year comes as
investors worry that China s huge economy
is slowing down. That has helped send the
price of oil plunging to its lowest level since
2004, the latest blow to US energy compa-
Industrial and technology companies such
as Boeing and Apple that do a lot of business
in China have also fallen sharply this week.
Mining companies such as Freeport-McMoRan
plunged as copper prices have fallen. China
is a major importer of copper.
Stocks started the day higher, driven in part
by news of an encouraging burst in hiring last
month by US employers. China s stock market
also rose 2.0 per cent overnight, recovering
somewhat after steep drops earlier in the week
triggered trading halts.
Indexes wavered between small gains and
losses for most of the day, but took a decisive
turn lower in the last hour of trading. That
made this the worst week since September
2011, when the market was roiled by the fight
over the US debt ceiling and Standard & Poor s
move to cut the credit rating of the US gov-
The Dow Jones industrial average
dropped 167.65 points, or 1.0 per cent, to
16,346.45. The Standard & Poor s 500
index fell 21.06 points, or 1.1 per cent, to
1,922.03. The Nasdaq composite index
shed 45.80 points, or 1.0 per cent, to
The Dow and S&P 500 are each down about
6.0 per cent for the week. The Nasdaq com-
posite fell even more, 7.3 per cent. That index
is heavily weighted with technology and biotech
companies, both of which were high-fliers
The largest losses on Friday went to financial
stocks. JPMorgan Chase lost US$1.35, or 2.2
per cent, to US$58.92 and Citigroup fell
US$1.43, or 3.0 per cent, to US$46.13. Health-
care stocks slumped, led by drug companies.
Energy stocks also skidded as the price of oil,
already at decade lows, continued to fall.
European stocks also rose early in the day,
but couldn t hang on. The FTSE 100 index
of leading British shares declined 0.7 per
cent while Germany s DAX lost 1.3 per
cent. The CAC-40 in France slid 1.6 per
The same pattern held in the US. In its
monthly jobs report, released before the stock
market opened, the Labour Department said
US employers added 292,000 jobs in Decem-
ber, far more than economists had forecast.
That s the latest sign the US economy is
still growing. On average employers added
284,000 jobs per month in the fourth quarter,
the best rate in a year.
Michael Fredericks, portfolio manager for
BlackRock Multi-Asset Income Fund, said the
labor market is healthy and wages could
improve this month. "These are unusually
strong job creation numbers," he said.
Fredericks said the low wage growth and
limited inflation will make the Federal Reserve
proceed cautiously as it raises interest rates.
In December the Fed raised rates for the first
time in nine years, but interest rates are still
Throughout the week, worries about China s
economy and shocks to its markets have can-
celed out positive news from the US and
While China s economy is still growing, that
growth isn t as fast as it has been. That could
hurt sales of everything from iPhones to oil
and heavy machinery.
Oil prices also lost ground. US crude fell
11 cents to close at US$33.16 a barrel in
New York and Brent crude, a benchmark
for international oils, declined 20 cents
to US$33.55 a barrel in London.
Exxon Mobil lost US$1.54, or 2.0 per
cent, to US$74.69 and Tesoro fell US$5.41,
or 5.0 per cent, to US$101.62.
The price of gold fell US$9.90, or 0.9 per
cent, to US$1,097.90 an ounce. Silver declined
42.6 cents, or 3.0 per cent, to US$13.918 an
ounce. Copper was unchanged at US$2.022 a
The euro fell to US$1.0903 from US$1.0927
and the dollar edged up to 117.67 yen from
117.50 yen late Thursday. Bond prices rose.
The yield on the 10-year Treasury note edged
down to 2.12 per cent from 2.15 per cent.
JANUARY 10 • 2016 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
Chinese stocks were volatile Friday and other Asian
markets rebounded after a plunge in Chinese prices
rattled global markets.
The Shanghai Composite Index was up 2.4 per
cent at 3,199.56 by late morning after swinging
between gains and losses.
Trading in Chinese stocks was suspended Thursday
after a key index plunged 7.0 per cent. China s stock
markets have little connection to the rest of its econ-
omy but two sharp price declines this week have
focused attention on the slowdown in Chinese growth.
Stocks worldwide and oil fell on concern about
weaker Chinese demand. The Dow Jones industrial
average sank 2.3 per cent and the Standard & Poor s
500 lost 2.4 per cent on Thursday. The Nasdaq com-
posite index fell 3.0 per cent.
European markets also fell. Germany s DAX slid
2.3 per cent, France s CAC 40 gave up 1.7 per cent,
and Britain s FTSE 100 lost 2.0 per cent.
"The poor start to the year clearly warns that global
growth concerns remain, that commodity prices are
still under downwards pressure and that volatility in
investment markets will likely remain high," said
strategist Shane Oliver of AMP Capital in a report.
In other Asian markets, Tokyo s Nikkei 225 rose
0.4 per cent to 17,848.10 while Sydney s S&P/ASX
200 was off 0.7 per cent at 4,973.20. Hong Kong s
Hang Seng advanced 1.1 per cent to 20,559.34 and
Seoul s Kospi was little changed at 1,903.14. Stocks
rose in Taiwan and were mixed in Southeast Asia.
On Thursday, Chinese stock trading halted for the
day after a key index known as the CSI 300 plunged
7.0 per cent, tripping a "circuit breaker" that is meant
to dampen volatility. On Friday, that benchmark
gained 3 per cent at the opening, then fell to a 4.3
per cent loss before recovering.
Late Thursday, Beijing suspended use of that "circuit
breaker" after economists warned it was adding to
volatility by encouraging investors to sell faster when
the market falls.
The latest plunge in Chinese stocks was set off by
concern Beijing is allowing its yuan to weaken too
fast against the dollar.
The People s Bank of China has allowed the yuan
to decline gradually since August after loosening its
tie to the dollar. The American currency has risen
over the past year, leaving the yuan overvalued com-
pared with other developing countries and hurting
On Thursday, the yuan s exchange rate was set at
its lowest level since 2011, sparking fears further
declines might lead to a capital outflow.
Worries about China were fueled by weaker-than-
expected December manufacturing activity. Those
fears have drowned out signs that the United States
and Europe are doing fairly well. AP
Gregory Rowe, left, with Livermore Trading Group, keeps an eye on stock prices at the New
York Stock Exchange, Friday, January 8, 2016. A rebound in Chinese stocks helped shore up the
mood in global stock markets Friday in the run-up to US jobs data. AP
Chinese investors monitor stock prices in a brokerage house in Beijing, Friday,
January 8, 2016. Chinese stocks were volatile Friday and other Asian markets
rebounded after a plunge in Chinese prices rattled global markets. AP
Chinese stocks volatile a day after sharp sell-off
US stock market
its worst week
since 2011How the Dow Jones industrial
average fared on Friday
The Dow Jones industrial average
dropped 167.65 points, or 1 per cent, to
The Standard & Poor's 500 index fell
21.06 points, or 1.1 per cent, to 1,922.03.
The Nasdaq composite index shed 45.80
points, or 1 per cent, to 4,643.63.
For the week:
The Dow is down 1,078.58 points, or 6.2 per
The S&P 500 is down 121.91 points, or 6 per
The Nasdaq is down 363.78 points, or 7.3 per
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