Home' Trinidad and Tobago Guardian : January 24th 2015 Contents JANUARY 24 • 2016 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
US stocks made their biggest
gain in more than a month
on Friday as oil prices
surged, lifting energy stocks.
Tech stocks also climbed as
Apple shares had their day
Energy companies soared after the price of
US crude jumped 9.0 per cent. Oil prices
reached their lowest level in 12 years earlier
this week, but they jumped Thursday and
The Dow Jones industrial average rose 210.83
points, or 1.3 per cent, to 16,093.51. The Stan-
dard & Poor s 500 index had its best day since
early December, gaining 37.91 points, or 2 per
cent, to 1,906.90. The Nasdaq composite
index made its biggest gain since September,
adding 119.12 points, or 2.7 per cent, to
The markets rose this week for the first
time in four weeks as the prospect of economic
stimulus in Europe helped put investors in a
buying mood, following a dismal beginning
to the new year. In Japan, the Nikkei 225 index
had its best day in four months as investors
hoped the Bank of Japan will also step in.
This week s gains didn t look likely on
Wednesday, when stocks nosedived along
with energy prices. At one point the Dow
tumbled 565 points. Since the first two weeks
of this year were its worst opening to a year
While the two-day surge may have investors
hoping the worst is behind them, Jim Paulsen,
chief investment strategist for Wells Capital
Management, said he still thinks the S&P 500
will slide to around 1,800 before a real recovery
comes. That s below even the darkest moments
from Wednesday s swoon.
"It s going to continue to be a struggle," he
said. "Everyone will be convinced we re head-
ing for recession, everyone will be convinced
we re in a bear market."
There was little trace of that view on Friday.
US crude rose US$2.66 to US$32.19 a barrel
in New York. Brent crude, a benchmark for
international oils, rose US$2.93, or 10 per
cent, to US$32.18 a barrel in London. US oil
climbed 21 per cent over the last two days
and it has recovered about half its losses from
earlier in the year.
Pipeline operator Kinder Morgan rose
US$1.46, or 10.5 per cent, to US$15.34 after
it jumped 16 per cent Thursday. Pipeline com-
pany Williams Cos added US$3.70, or 23.1
per cent, to US$19.74. Devon Energy gained
US$1.45, or 6.0 per cent, to US$25.63.
Goldman Sachs analyst Jeffrey Currie said
energy prices have fallen so far that the indus-
try is making real cuts in production. "We
are now at a price level that is creating real
fundamental change," he said.
Low energy prices are good for many indus-
tries and consumers, but investors have gotten
nervous that falling energy prices foretell a
big slowdown in the global economy. Currie
said it will take a long time for the market
to recover from the huge decline in energy
prices. But he said prices are down because
of a supply glut, not because demand is col-
Shares of Apple, which have lost about a
quarter of their value in the last six months,
rose US$5.12, or 5.3 per cent, to US$101.42.
Microsoft gained US$1.81, or 4.0 per cent, to
US$52.29. Facebook added US$3.78, or 4.0 per
cent, to US$97.94 and Alphabet added
US$18.79, or 2.6 per cent, to US$745.46.
On Friday European Central Bank head Mario
Draghi said the bank has a lot of options to
boost inflation and is determined and willing
to act. On Thursday Draghi suggested the ECB
will consider more stimulus action at its next
meeting in March.
France s CAC 40 added 3.1 per cent and
Germany s DAX rose 2 per cent. Britain s FTSE
100 climbed 2.2 per cent.
Japan s Nikkei 225 index rose 5.9 per cent.
Earlier this week the index entered a bear mar-
ket, meaning it was down 20 per cent from
a recent peak. South Korea s Kospi gained 2.1
per cent and Hong Kong s Hang Seng added
2.9 per cent. The Shanghai Composite Index
in mainland China climbed 1.3 per cent.
Paulsen, chief investment strategist for Wells
Capital Management, said investors turn to
utilities and telecom stocks when the market
gets rough. Companies in those industries pay
relatively large dividends, which means their
prices are more stable and the stocks behave
almost like bonds.
"They are just the most conservative sector
of the stock market," he said.
Credit card company American Express gave
a very negative outlook for 2016 and 2017. The
company expects its earnings per share to fall
this year even though it s selling credit card
accounts tied a co-branded credit card it offers
with Costco. That relationship is ending.
The stock fell US$7.58, or 12.1 per cent, to
US$55.06, its biggest loss in almost seven years.
American Express is a Dow component, and
that loss caused the Dow to lag the other major
Gold and copper producer Freeport-
McMoRan tumbled 39 cents, or 9.1 per cent,
to US$3.94. Its shares have dropped 42 per
cent in 2016 after huge plunges the previous
two years. The company has struggled as metals
prices have fallen, and its decision a few years
ago to invest in oil and gas came shortly before
those prices also plunged.
The largest oilfield services company in the
world said it cut 10,000 jobs in the fourth
quarter after eliminating some 20,000 earlier
However Schlumberger said it will buy back
US$10 billion in stock. Its share price has fallen
25 per cent over the last year. The stock rose
US$3.7, or 6.1 per cent, to US$65.20.
In other energy trading, wholesale gas added
5.3 cents, or 5.1 per cent, to US$1.084 a gallon.
Heating oil picked up 9.8 cents, or 10.9 per
cent, to 99.6 cents a gallon. Natural gas inched
up to US$2.139 per 1,000 cubic feet.
US government bond prices fell. The yield
on the 10-year Treasury note rose to 2.05 per
cent from 2.03 per cent a day earlier.
The price of gold fell US$1.90 to US$1,096.30
an ounce and silver fell 3.7 cents to US$14.06
an ounce. Copper rose 0.6 cents to US$2.003
The dollar rose to 118.78 yen from 117.50 on
Thursday. The euro weakened on the prospect
of further ECB stimulus. It fell to US$1.0791
from US$1.0875. AP
KEEPING SCORE: Japan s benchmark Nikkei
225 index jumped 3.6 per cent to 16,592.84 while
South Korea s Kospi gained 1.7 per cent to 1,872.36.
Hong Kong s Hang Seng added 2.2 per cent to
18,949.18 while the Shanghai Composite Index in
mainland China climbed 0.1 per cent to 2,883.91.
Australia s S&P/ASX 200 rose 1.2 per cent to 4,921.20.
Benchmarks in Taiwan, Southeast Asia and New
Zealand were also up.
STIMULUS HOPE: European Central Bank chief
Mario Draghi cheered investors by saying the bank
is prepared to take action as early as its next meeting
in March to expand existing stimulus efforts. While
the ECB left key interest rates and its 1.5 trillion euro
(US$1.6 trillion) monetary stimulus program
unchanged Thursday, Draghi underscored his will-
ingness to ramp up the program if plummeting oil
prices and market toil threaten the continent s weak
ENERGY: Rebounding oil prices are also supporting
investor sentiment. Crude futures extended gains
after bouncing back from their worst day in four
months. US benchmark crude rose 20 cents to
US$29.73 a barrel in electronic trading on the New
York Mercantile Exchange.
The contract rose US$1.18, or 4.2 per cent, to close
at US$29.53 a barrel Thursday. Brent crude, a bench-
mark for international oils, rose 24 cents to US$29.49
a barrel in London.
Traders work at the New York Stock Exchange, Friday, January 22, 2016. AP
How the Dow Jones industrial
average fared on Friday
The Dow Jones industrial average surged
210.83 points, or 1.3 per cent, to 16,093.51.
The Standard & Poor's 500 index jumped
37.91 points, or 2 per cent, to 1,906.90.
The Nasdaq composite index climbed 119.12
points, or 2.7 per cent, to 4,591.18.
For the week:
The Dow rose 105.43 points, or 0.7 per cent.
The S&P 500 added 26.57 points, or 1.4 per
The Nasdaq gained 102.76 points, or 2.3 per
For the year:
The Dow is down 1,331.52 points, or 7.6 per
The S&P 500 is down 137.04 points, or 6.7 per
The Nasdaq is down 416.23 points, or 8.3 per
lead a broad
rally as the price
of oil soars
monitor stock prices on
an electronic display in a
brokerage house in
Beijing, Friday, January
22, 2016. Japan led a
rally in Asian stocks
Friday, extending a
global market rebound
fueled by the prospect
of more stimulus from
the European Central
Bank and a bounce in
battered oil prices. AP
Asia stocks extend global rally on ECB stimulus hopes
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