Home' Trinidad and Tobago Guardian : January 17th 2016 Contents JANUARY 17 • 2016 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
Never before has Wall Street
gotten off to a worse start
to a year. The stock market
capped the first two weeks
of 2016 with a steep slide
Friday that sent the Dow
Jones industrial average down nearly 400
All three major stock indexes---the Dow, the
Nasdaq composite index and the Standard &
Poor s 500---are now in what s known as a
correction, or a drop of 10 per cent or more
from their recent peaks.
The market has been on a stomach-churning
ride since the start of the year, wrenched up---
but mostly down---because of alarm over a
slowdown in China and the plunging price of
oil to its lowest level in 12 years. Investors are
already seeing damage to US corporate profits,
particularly at energy companies.
The Dow slid 390.90 points, or 2.4 per cent,
to 15,988.15 points. The average had been down
more than 500 points early in the afternoon.
The S&P 500 ended down 44.84 points, or
2.3 per cent, at 1,877. The Nasdaq dropped
126.59 points, or 2.7 per cent, to 4,488.42.
The Dow and S&P 500 have now fallen
about 8.0 per cent this year, while the Nasdaq
is off about 10 per cent.
"Oil is the root cause of today," said Dan
Farley, regional investment strategist at the
Private Client Reserve at US Bank. "People
are uncertain, and when they re uncertain
they re scared."
Crude oil has dropped below US$30 a barrel
from a high of over US$100 during the summer
of 2014, eviscerating energy company profits.
On Friday, Williams Cos. led a slide among
oil, gas and mining companies, falling US$2.19,
or 12 per cent, to US$16.10.
Investors also got some discouraging eco-
nomic news on Friday: The Federal Reserve
said US industrial production, which includes
manufacturing, mining and utilities, dropped
in December for the third month in a row.
And another government report indicated US
retail sales dipped last month.
Many investors had welcomed the new year
with fairly high hopes. They expected oil prices
would stabilise. After a market correction in
August, few forecast it would happen again
so soon. And the Federal Reserve s move in
December to raise interest rates for the first
time in nearly 10 years signaled to many that
the US economy was healthy.
"The hope was global growth would stabilise,
and early in 2016 here, that has been a dis-
appointment, too," said David Chalupnik, head
of equities at Nuveen Asset Management.
Despite the rough start to the year, Wall
Street watchers are not ready to say that the
bull market is over.
"We don t believe we re going into a bear
market," Chalupnik said. "The reason for that
is the US economy is sound."
Intel dropped 9.1 per cent after the chip-
maker posted its fourth-quarter results, noting
its personal computer business continues to
slump. The stock was the biggest decliner in
the Dow. It fell US$2.98 to US$29.76.
Benchmark US crude fell US$1.78, or 5.7
per cent, to US$29.42 a barrel in New York.
Brent crude, a benchmark for international
oils, fell US$1.94, or 6.3 per cent, to US$28.94
a barrel in London.
Stocks opened higher in Europe but quickly
fell. Germany s DAX lost 2.5 per cent, while
France s CAC 40 dropped 2.4 per cent. Britain s
FTSE 100 fell 1.9 per cent.
In China, the Shanghai Composite Index
slid 3.6 per cent to its lowest close in 13 months.
China s official Xinhua News Agency reported
that new bank loans during the last month
fell from a year earlier, another sign that the
country s economic growth is slowing from
the torrid pace of the past few years.
Hong Kong s Hang Seng dropped 1.5 per
cent. Japan s Nikkei 225 lost 0.5 per cent and
South Korea s Kospi 1.1 per cent.
In other energy trading, wholesale gasoline
fell 5 cents to close at US$1.02 a gallon, heating
oil fell 5 cents to close at 93 cents a gallon,
and natural gas fell 4 cents to close at US$2.10
per one thousand cubic feet.
Precious and industrial metals futures closed
mixed. Gold rose US$17.10 to US$1,090.70 an
ounce, silver gained 15 cents to US$13.90 an
ounce and copper fell 3 cents to US$1.94 a
Bond prices rose. The yield on the 10-year
Treasury note fell to 2.03 per cent from 2.09
per cent late Thursday. The euro rose to
US$1.0911 from US$1.0862, while the dollar
fell to 117.05 yen.
Asian stocks mixed
despite Wall Street rallies
Asian stock markets were mixed Friday as investors were reluctant to return
to risky assets despite ebbing fear about the Chinese currency devaluations and
Wall Street rallies overnight. The price of oil fell.
KEEPING SCORE: Japan s Nikkei 225 rebounded after a steep fall in the
previous session, gaining 0.7 per cent to 17,367.22. Australia s S&P/ASX 200
added 0.2 per cent to 4,919.90. But South Korea s Kospi lost 0.2 per cent to
1,893.86 while Hong Kong s Hang Seng index fell 0.5 per cent to 19,705.63.
China s Shanghai Composite Index was down 1.0 per cent to 2,979.08. Stocks
in Southeast Asia were mostly higher.
OIL: The price of crude oil fell again after a rebound in the previous session
although it still traded above US$30 a barrel. Benchmark US crude fell 58 cents
to US$30.62 per barrel in New York. The contract rose 72 cents, or 2.4 per cent,
to close at US$31.20 a barrel on Thursday. Brent crude, a benchmark for inter-
national oils, fell 21 cents to US$30.67 per barrel in London.
CURRENCIES: The euro rose to US$1.0878 from US$1.0859, while the dollar
fell to 117.99 yen from 118.20 yen. AP
How the Dow Jones industrial
average fared on Friday
The Dow Jones industrial average
lost 390.97 points, or 2.4 per cent, to
The S&P 500 index slid 41.51
points, or 2.2 per cent, to 1,880.33.
The Nasdaq composite fell 126.59
points, or 2.7 per cent, to 4,488.42.
For the week:
The Dow is down 358.37 points, or
2.2 per cent.
The S&P 500 is down 41.70 points,
or 2.2 per cent.
The Nasdaq is down 155.22 points,
or 3.3 per cent.
For the year:
The Dow is down 1,436.95 points,
or 8.3 per cent.
The S&P 500 is down 163.61
points, or 8 per cent.
The Nasdaq is down 518.99 points,
or 10.4 per cent.
A trader monitors stock prices at the New York Stock Exchange, Friday, January 15, 2016. US
stocks plunged again on Friday, completing the worst two-week start to a year ever. (AP )
US stock market
start to a year
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