Home' Trinidad and Tobago Guardian : April 6th 2014 Contents APRIL 2014 • WEEK ONE www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
NEW YORK---A slump in Internet and other
technology stocks pulled the broader market
lower Friday, as traders turned on the same
companies they flocked to earlier this year.
Google, Netflix and other pillars of the Inter-
net economy took a beating.
It was a bad day in an otherwise decent
week. The Standard & Poor s 500 index ended
the week slightly higher.
Mixed signals in the government s monthly
jobs report gave investors little direction Fri-
day. The government said that US employers
added more workers to their payrolls last
month, but the overall report presented a
mixed picture, and the unemployment rate
remained at 6.7 per cent.
The stock market crept higher to start,
began losing steam at lunchtime and then
turned lower in the afternoon. The jobs report
wasn t the culprit, said Uri Landesman, pres-
ident of the hedge fund Platinum Manage-
ment. It was likely the "momentum" traders,
he said, people who chased high-flying stocks
and are having a change of heart.
Tech stocks had soared over the past year,
pushing the Nasdaq composite index up 28
per cent, as traders piled into Internet and
biotechnology companies. Netflix and Face-
book, for instance, doubled in price over that
"It s like (traders) took a look at some of
these high-flying Internet companies and
said, "How can I justify these prices? " Lan-
The technology-heavy Nasdaq com-
posite index plunged 110.01 points, or
2.6 per cent, to close at 4,127.73, its
biggest one-day drop since February.
The S&P 500 index fell 23.68 points,
or 1.3 per cent, to 1,865.09. The Dow
Jones industrial average dropped 159.84
points, or 1.0 per cent, to 16,412.71.
Utilities, which investors buy to play it safe
and collect dividend payments, bucked the
overall market and edged higher.
Coca-Cola, Johnson & Johnson and other
big corporations whose stocks are often less
volatile than the broader market also made
gains. Coca-Cola climbed 15 cents, or 0.4
per cent, to US$38.22.
Before the market opened Friday, the Labor
Department reported that employers added
192,000 jobs in March. That s less than econ-
omists had expected and also below February s
total of 197,000. On the bright side, employers
added a combined 37,000 more jobs in Feb-
ruary and January than the government first
estimated. A half-million Americans started
looking for work last month, and many of
them found jobs.
Earlier in the week, a string of reports
on manufacturing and hiring nudged the
stock market to its record highs. Robert
Pavlik, chief market strategist at Banyan
Partners, said many investors have argued
that tough winter weather held the econ-
omy back at the start of the year and that
things would turn around as temperatures
rose. The jobs report, Pavlik said, didn t
support their case. "A lot of what people
have been saying about payrolls isn t true,"
Pavlik said he thinks the economy is
likely to keep plodding along. With the
market trading near record highs, it s hard
for him to see any good reason for stocks
to climb much higher.
In the bond market Friday, traders pushed
Treasury prices up and yields down. The
yield on the 10-year Treasury note fell to
2.73 per cent from 2.80 per cent late Thurs-
day. The price of crude oil rose 85 cents to
settle at US$101.14 a barrel. Gold gained
US$18.90 to close at US$1,303.50 an ounce,
its biggest gain in three weeks.
Among other companies
making big moves:
• GrubHub jumped 31 percent in its first
day of trading on the New York Stock
Exchange. The online food delivery com-
pany, which runs the Seamless website,
raised US$192.5 million in its initial public
offering late Thursday, selling shares at
US$26 each. GrubHub s stock jumped US$8
• CarMax slumped after the seller of used
cars said its quarterly income dropped as
an accounting correction outweighed higher
demand for cars. The company s stock
slumped US$2, or 4 percent, to US$45.56.
• News that a Swedish drug company
rebuffed a merger offer from Mylan, the
generic drugmaker, sent Mylan s stock high-
er. Mylan rose 77 cents, or 2.0 per cent, to
US$50.63. Meda AB, the Swedish company,
didn t explain why its board turned down
Tech stocks, once highfliers,
drop; Nasdaq sinks
LONDON---European stocks closed the week on a high
Friday after investors concluded that US jobs data wouldn t
prompt a change in the Federal Reserve s policy stance.
The US Labour Department found that the world s largest
economy added 192,000 jobs in March. That was slightly
below February s total of 197,000 but more or less exactly the
consensus of analysts expectations. The unemployment rate
was unchanged at 6.7 per cent.
Because the figures matched predictions, they failed to
change perceptions over the future policy path of the Federal
Reserve. Over the past few months, the Fed has been reducing
its monetary stimulus amid mounting evidence of a sustainable
economic recovery in the US
"The upshot is that tapering will continue unabated, but
markets have learnt to cope with this status quo and are
unlikely to be troubled by it as we head into the new week,"
IG market analyst Alastair McCaig said.
In Europe, the FTSE 100 index of leading British
shares closed up 0.7 per cent at 6,695.55 while Germany s
DAX rose the same rate to 9,695.77. The CAC-40 in
France ended 0.8 per cent higher at 4,484.55.
The dollar was trading more or less where it was before the
data, with the euro down 0.1 per cent at US$1.3700. On Thurs-
day, the euro faltered as European Central Bank President
Mario Draghi stressed that the bank was ready to act if inflation
in the 18-country eurozone remained low.
Earlier in Asia, Tokyo s Nikkei 225 edged down 0.1
per cent to 15,063.77 and Seoul s Kospi drifted down
0.3 per cent to 1,988.09. Hong Kong s Hang Seng shed
0.2 per cent to 22,510.08.
But mainland China s Shanghai Composite gained
0.7 per cent to 2,058.83 while Australia s S&P ASX/200
added 0.2 per cent to 5,422.80.
Markets unmoved by broadly in-line US jobs data
Opower CEO and founder
Daniel Yates, third left, joins
the celebration during the
company's IPO on the floor
of the New York Stock
Exchange on Friday, April 4.
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