Home' Trinidad and Tobago Guardian : January 31st 2016 Contents JANUARY 31 • 2016 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG9
Stocks soared on the last trading
day of January, with Microsoft,
Visa and other tech stocks
making the biggest gains in a
broad market rally Friday.
Indexes rose throughout the day and finished
with their biggest gains in about five months.
Asian stocks jumped after the Bank of Japan
moved to stimulate the economy, and European
markets also rose. In the US, tech stocks
climbed following strong quarterly results from
Microsoft and Visa. Materials companies and
banks also made large gains, and the price of
oil rose for the fourth day in a row.
The US government said Friday that the
economy slowed in the fourth quarter, a pos-
sibility that had worried investors. But its esti-
mate of the country s gross domestic product
was about equal to analysts forecasts and
didn t hurt stocks.
The Dow Jones industrial average surged
396.66 points, or 2.5 per cent, to 16,466.30.
The Standard & Poor s 500 index rose 46.88
points, or 2.5 per cent, to 1,940.24, as more
than 480 of its component stocks rose. The
Nasdaq composite index jumped 107.28 points,
or 2.4 per cent, to 4,613.95.
Stocks made some big gains in the last two
weeks, but still finished January with hefty
Microsoft added US$3.04, or 5.8 per cent,
to US$55.09 after its profit and revenue beat
expectations. The tech giant posted strong
results from its cloud computing business and
the unit that sells PC software and Surface
tablets and Xbox game consoles.
Visa and MasterCard both rose after report-
ing solid results. Visa climbed US$5.16, or 7.4
per cent, to US$74.49 and MasterCard picked
up US$5.60, or 6.7 per cent, to US$89.03.
E-commerce company Amazon took its
largest one-day slide in more than a year.
Amazon s quarterly profit more than doubled,
but it still fell short of Wall Street s forecasts
because of increased costs. Some of those
related to its Fulfillment by Amazon service,
which handles shipping for sellers and makes
them eligible for Amazon Prime shipping. The
stock lost US$48.35, or 7.6 per cent, to US$587.
The US economy has been expanding for
six and a half years, but on Wednesday the
Federal Reserve cautioned that the US economy
is slowing down. The Fed also expressed con-
cerns about global growth. Stocks tumbled
after the Fed released its assessment.
Crude oil prices kept rising. Benchmark US
oil added 40 cents, or 1.2 per cent, to US$33.62
a barrel in New York. Brent crude, a benchmark
for international oils, gained 85 cents, or 2.5
per cent, to US$34.74. Oil prices have increased
for four days in a row as investors hope for
cuts in global production.
US government bond prices rose. The yield
on the 10-year Treasury note fell to 1.93 per
cent from 1.98 per cent. European bond yields
also sank. The euro weakened to US$1.0829
January was a tough month for the market,
and the beginning of the year was the worst
in the history of the Dow average and the S&P
500 index. Both fell into a correction, or a
drop of at least 10 per cent from a recent peak.
The small-cap Russell 2000 index entered
a bear market, which means a 20 per cent
The Dow and S&P 500 both fell more than
5.0 per cent in January, while the Nasdaq lost
almost 8.0 per cent. For each index, that was
the largest drop in a single month in years.
The Russell finished January down almost 9
Google s parent, Alphabet, might soon over-
take Apple as the world s most valuable publicly
traded company. Alphabet has surged over the
last year while Apple has struggled. Both com-
panies are valued at more than US$500 billion,
and Apple is currently about US$16 billion
On Friday the Bank of Japan said it will
charge money to banks that leave large amounts
of cash parked at the central bank. The policy
is intended to encourage commercial banks to
lend more money. That could stimulate invest-
ment and growth in Japan s struggling econ-
Japanese bonds and fell the dollar got
stronger compared to the yen. Friday afternoon
the dollar traded at 121.10 yen, a huge move
for the currency, which traded at 118.78 yen
Luke Bartholomew, investment manager at
Aberdeen Capital Management, said the move
by Japan s central bank is a change of course
for the bank and for its governor, Haruhiko
"The surprise is they re going to negative
rates a little more than a week after Kuroda
explicitly said they had no intention of doing
so," Bartholomew said. He said the Bank of
Japan will need to do more to strengthen
Japan s economy.
Japan s Nikkei 225 jumped 2.8 per cent and
Hong Kong s Hang Seng gained 2.5 per cent.
The Shanghai Composite in mainland China
rose 3.1 per cent. European indexes also rose.
Germany s DAX climbed 1.6 per cent. Britain s
FTSE 100 added 2.6 per cent and France s
CAC 40 advanced 2.2 per cent.
Wholesale gasoline picked up 2.4 cents, or
2.2 per cent, to US$1.103 a gallon. Heating oil
added 2.4 cents, or 2.3 per cent, to US$1.055
a gallon. Natural gas rose 11.6 cents, or 5.3 per
cent, to US$2.298 per 1,000 cubic feet.
Metals prices didn t change much. Gold
rose 80 cents to US$1,116.40 an ounce and
silver gained 1.1 cents to US$14.243 an ounce.
Copper added 1.6 cents to US$2.067 a pound.
Japanese stocks were lower Thursday after
the country s central bank introduced a negative
rate interest policy that could boost the econ-
omy but also hurt earnings of major banks.
The yen dived.
Other Asian markets were mostly higher
after China s top economy official said there
is no basis for the yuan to continuously weak-
KEEPING SCORE: Japan s Nikkei 225
jumped more than 3 per cent after the BOJ
announcement but quickly surrendered those
gains to be 0.5 per cent lower at 16,933.99.
The policy decision is a possible boost for the
economy but viewed by investors as negative
for banks. Shares of Mitsubishi UFJ Financial
Group fell 5 per cent. Hong Kong s Hang Seng
gained 1.8 per cent to 19,544.72 and the Shang-
hai Composite in mainland China rose 2 per
cent to 2,708.83. Australia s S&P/ASX 200
inched down 0.1 per cent to 4,973.00 while
South Korea s Kospi fell 0.2 per cent to
1,902.14. Stocks rose in Taiwan, Singapore,
Thailand and the Philippines but fell in Indone-
JAPAN RATE: The Bank of Japan said it
is imposing a 0.1 per cent fee on some deposits
left with the central bank, effectively a negative
interest rate. It hopes that will encourage com-
mercial banks to lend more and stimulate
investment and growth. Latest data showed
Japan s core inflation rate slipped 0.5 per cent
in 2015 on low oil prices while consumer
spending fell 4.4 per cent in December over
a year earlier.
CHINESE YUAN: Chinese Premier Li
Keqiang said on Thursday that there is no
basis for continuous depreciation of the yuan,
China s official Xinhua news agency reported.
In his phone conversation with International
Monetary Fund Managing Director Christine
Lagarde, Li said Beijing has no intention of
boosting exports by devaluing the renminbi.
ENERGY TALK: The Kremlin said on
Thursday it is actively discussing the instability
of oil markets with the world s key producers.
Even though Russia said there was no concrete
plan for a coordinated cut in production, it
was enough to push the price of oil higher.
Investors hope that talks could lead to pro-
duction cuts that would begin to alleviate a
global supply glut.
CURRENCIES: The dollar jumped to 120.34
yen from 118.84 yen the previous day. The
euro rose to US$1.0943 from US$1.0932. AP
How the Dow Jones industrial
average fared on Friday
The Dow Jones industrial average
climbed 396.66 points, or 2.5 per cent, to
The Standard & Poor's 500 index rose
46.88 points, or 2.5 per cent, to 1,940.24.
The Nasdaq composite index jumped
107.28 points, or 2.4 per cent, to 4,613.95.
For the week:
The Dow rose 372.79 points, or 2.3 per
The S&P 500 gained 33.34 points, or 1.8
The Nasdaq added 22.77 points, or 0.5
For the year:
The Dow is down 958.73 points, or 5.5
The S&P 500 is down 103.70 points, or
5.1 per cent.
The Nasdaq is down 393.46 points, or 7.9
Specialist Paul Cosentino, foreground, works with traders at his post on the floor of the New
York Stock Exchange, Wednesday, January 27, 2016. Stocks are opening broadly lower as
energy companies take another tumble and after Apple predicted its first sales decline in 13
US stocks soar
to finish tough
month as tech
Japan stocks down despite BOJ move, other markets gain
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