Home' Trinidad and Tobago Guardian : June 1st 2014 Contents JUNE 1 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
The stock market closed out May
mostly higher Friday, sending two
out of the three major US indexes
to record highs.
Trading was uneven, and indexes moved
between small gains and losses for most of the
day. A late push higher left the Dow Jones indus-
trial average and Standard & Poor's 500 at all-
time highs, but just barely.
May was the best month for investors since
February. The S&P rose 2.1 per cent for the
month, while the Dow rose 0.8 per cent and the
Nasdaq rose 3.1 per cent.
"This market may have been choppy earlier
in the year, but the trend is higher," said Karyn
Cavanaugh, a market strategist with Voya Invest-
ment Management, formerly known as ING
The Dow rose 18.43 points, or 0.1 per cent,
to close at 16,717.17, less than two points above
its previous record high set on May 13.
The S&P 500 index rose 3.54 points, or 0.2
per cent, to 1,923.57, also closing at a record.
The only index to fall was the Nasdaq composite,
which ended down 5.33 points, or 0.1 per cent,
On Friday, investors had two somewhat dis-
appointing reports on the US consumer.
The Commerce Department said consumer
spending unexpectedly fell 0.1 per cent in April,
the first drop in that indicator in a year. Econ-
omists expect the drop to be temporary, however.
Consumer spending jumped 1 per cent in March.
"It is obvious that after an unseasonably colder
January and February, consumers came out with
a vengeance in March," Chris Christopher, an
economist at IHS Global Insight, wrote in a note
to clients. "So, April's poor showing on the
spending front is payback for a strong March."
In a separate report, the University of Michi-
gan's consumer sentiment index fell more than
analysts were expecting. The index slipped to
81.9 in May from 84.9 in April. Economists had
Key economic data comes out next week,
including the May jobs report on Friday. Econ-
omists expect the U.S. economy created 220,000
jobs in May, and the unemployment rate fell to
6.3 per cent, according to FactSet, a financial
information provider. The European Central
Bank will also have its interest rate policy meeting
Among stocks, Lions Gate Entertainment was
one of the biggest decliners Friday. The movie
studio slid $3.40, or 12 per cent, to $26.13 after
reporting a profit of 35 cents per share, a 70 per
cent drop from the year before and well below
what analysts had expected. Lions Gate's movies
include the "The Hunger Games" series.
Sunglasses retailer Pacific Sunwear dropped
52 cents, or 18 per cent, to $2.42. The company
warned investors that it would report a two-
cent loss this quarter, not the two-cent profit
that analysts had expected.
The yield on the 10-year Treasury note was
little changed at 2.47 per cent. Bond yields are
the near their lows for the year thanks to strong
demand from foreign and U.S. buyers.
"If we were in a normal bond market, these
yields would signal weakness in the U.S. econ-
omy," said Randy Frederick, managing director
of trading and derivatives at Charles Schwab.
"But I think what's going on is more of a tem-
Roughly 3.2 billion shares traded hands on
Friday on the New York Stock Exchange, slightly
below the 50-day average. Volume has been rel-
atively light this week, which was shortened by
the Memorial Day holiday in the U.S. on Mon-
Financial markets drifted Friday on the last
trading day of the month, when many investors
traditionally close out positions.
Sentiment, particularly across stock markets,
has been fairly buoyant over the past month
primarily because the main US stock indexes
have hit a series of all-time highs. Those traders
who may have been tempted by the age-old
adage to "sell in May and stay away" may be
regretting the move.
"'Sell in May' appears to have been cancelled
due to lack of interest, so now we see if June
will provide any succor for the bears," said
Chris Beauchamp, market analyst at IG.
Next week, investors will have a lot to con-
tend with, notably the European Central Bank's
monthly policy meeting where a further stim-
ulus to the 18-country eurozone economy is
expected, and the monthly U.S. nonfarm pay-
rolls report, which often sets the market tone
for a couple of weeks after its release.
In Europe, the FTSE 100 index of leading
British shares closed 0.4 per cent lower at
6,844.51 while the CAC-40 in France fell 0.2
perc ent to 4,519.57. Germany's DAX was
steady at 9,943.27.
In the US, the Dow Jones industrial average
was down 0.3 per cent at 16,658 while the
broader S&P 500 index, which closed Thursday
at another record high, fell 0.1 per cent to
1,919. On Thursday, U.S. investors brushed
aside a government report showing that the
US economy contracted by an annualized rate
of 1 per cent in the first three months. Blaming
a cold snap across much of the US, they
focused on further upbeat weekly unemploy-
Elsewhere, the yen briefly advanced against
the dollar after figures showed Japan's con-
sumer price index rose 3.2 per cent in April,
the highest inflation rate since 1991. Higher
inflation was driven by a sales tax increase
that is expected to dampen growth this quarter.
At one stage the dollar had fallen to 101.48
yen. It's recovered through the day to 101.73
Following the yen's ascent earlier, Japan's
Nikkei 225 declined 0.3 per cent to 14,632.38
as some investors fretted over the impact of
the export-sapping strength of the yen.
Elsewhere in Asia, South Korea's Kospi
slipped 0.9 per cent to 1,994.96 as the South
Korean won strengthened to the highest level
against the dollar in more than five years. But
Hong Kong's Hang Seng added 0.3 per cent
Dow, S&P close off
May at record highs
How the markets
The stock market closed out May on a
mostly higher note Friday, sending two
out of the three major U.S. indexes to
Trading was uneven, and indexes moved
between small gains and losses for most
of the day. A late push higher left the Dow
Jones industrial average and Standard &
Poor's 500 at all-time highs, but just bare-
The Dow Jones industrial average added
18.43 points, or 0.1 per cent, to 16,717.17.
The Standard & Poor's 500 index rose
3.54 points, or 0.2 per cent, to 1,923.57.
The Nasdaq composite index fell 5.33
points, or 0.1 per cent, to 4,242.62.
The Dow is up 110.90 points, or 0.7 per
The S&P 500 index is up 23.04 points,
or 1.2 per cent.
The Nasdaq is up 66.03 points, or 1.4
The Dow is up 140.51 points, or 0.9 per
The S&P 500 index is up 75.21 points,
or 4.1 per cent.
The Nasdaq is up 66.03 points, or 1.6
Global markets drift as traders close out month
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