Home' Trinidad and Tobago Guardian : August 17th 2014 Contents AUGUST 17 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
STOCKS | SBG11
As headlines about an appar-
ent escalation of the conflict
in eastern Ukraine hit
traders' screens, selling was
the word on Wall Street.
Once again, though, for
many it looked like nothing but another buying
opportunity in US stocks.
Benchmark US Treasury yields hit their
lowest in 14 months on Friday after Ukraine
said its forces had attacked and partly destroyed
a Russian armored column that entered Ukrain-
ian territory overnight.
The S&P 500 ended Friday down a mere
fraction of a point. The three major US stock
indexes posted a second straight week of gains
after a correction that evaporated following a
brief drop of 4.0 per cent.
An escalation of the conflict in eastern
Ukraine will likely bring stronger economic
sanctions against Russia from Europe and the
United States; and harsher retaliation from
Business sentiment is already on edge in
Germany as Europe's largest economy deals
with reduced trade with Russia. An index of
Russian equities has dropped 6 per cent for
the year so far. Against that backdrop, US
stocks---backed by earnings---still look like the
best option for investors in developed mar-
US-based stock funds that invest in Euro-
pean equities have marked nine straight weeks
of outflows, according to Lipper, a Thomson
Reuters company. Flows into US stock funds
in that time have come to about US$3 billion.
"If you're concerned about increased tension
in Ukraine, that's the trade; at least for now,"
said Art Hogan, chief market strategist at
Wunderlich Securities in New York.
"We are the cleanest shirt in the hamper,"
he said of the US stock market.
During the selloff on Friday, the utilities
sector remained strong, rivaled only by energy
stocks, with investors focusing on high-div-
idend payers as US Treasury bond yields fell.
Looking forward, though, unless something
else happens to upset markets, investors seem
more focused on the re-emergence of lead-
ership from the healthcare, biotechnology and
tech sectors. The Nasdaq Biotech Index ended
Friday up 0.9 per cent, gaining 4.6 per cent
for the week.
Brian Reynolds, chief market strategist at
Rosenblatt Securities in New York, believes
tech, healthcare and large-cap biotechs are in
position to lead the US stock market higher
for the next several weeks. He sees the S&P
500 rising on Monday if tensions do not
"If Russia does not escalate, stocks are likely
to open above the 1,960 they were at earlier
today as people who put on knee-jerk shorts
cover," he wrote late on Friday.
At a 4.6 per cent rate, revenue growth for
S&P 500 companies is expected to be higher
than estimates going back to October last year.
Even as economic figures remain somewhat
mixed, investors still remain positive about
overall US demand.
"These are horrible human tragedies and
that's worthy of mention every time this comes
up," said Lawrence Creatura, portfolio manager
at Federated Investors in Rochester, New York.
"However, the economic impact (in the United
States) has been small."
How the Dow Jones industrial
average did Friday
The stock market recovered from a midday
swoon caused by the latest worries over Ukraine
and ended little changed on Friday. The Ukrain-
ian president said his military destroyed most
of a Russian military convoy that entered his
country. Russia denied it.
The Dow Jones industrial average fell
50.67, or 0.3 per cent, to 16,662.91
The Standard & Poor's 500 index fell
0.12 of a point to 1,955.06.
The Nasdaq composite gained 11.93
points, or 0.3 per cent, to 4,464.93.
For the week:
The Dow was up 108.98 points, or 0.7
The S&P 500 was up 23.47 points, or
1.2 per cent.
The Nasdaq was up 94.03 points, or
2.2 per cent.
For the year:
The Dow is up 86.25 points, or 0.5 per
The S&P 500 index is up 106.70 points,
or 5.8 per cent.
The Nasdaq is up 288.34 points, or 6.9
UK stocks pared their advance in the final hour of trading,
leaving the FTSE 100 Index little changed, after Ukraine said
its troops attacked a Russian military convoy.
BHP Billiton Ltd. (BHP) gained 1.2 per cent after the world's
biggest mining company said it may spin off some assets.
Premier Oil (PMO) Plc climbed 3.2 per cent after UBS AG
upgraded the shares. New World Resources Plc lost 4.8 per
cent after saying it won't make a payment on some bonds.
The FTSE 100 added 3.82 points, or 0.1 percent, to 6,689.08
at the close in London, paring an advance of as much as 0.9
percent. The benchmark gauge has still risen 1.9 per cent this
week, its biggest weekly advance since May. The broader FTSE
All-Share Index rose less than 0.1 per cent today, while Ireland's
ISEQ Index advanced 0.6 per cent.
Ukrainian government troops partially destroyed an armed
convoy that entered the country through a rebel-held section
of its border with Russia, a spokesman for the country's military
told reporters in Kiev.
BHP Billiton gained 1.2 per cent to 2,050 pence. The company
may announce next week a spinoff of assets, according to a
statement. The directors will consider whether to focus on
BHP Billiton's four main businesses of iron ore, copper, coal
and petroleum at a meeting next week.
Rio Tinto Group, the second-biggest commodity producer,
advanced 0.9 percent to 3,406 pence.
Premier Oil climbed 3.2 per cent to 336.8 pence after UBS
raised its recommendation on the shares to buy from neutral.
The brokerage said the company intends to narrow the gap
between the stock price and net asset value and may boost
its share buyback.
New World Resources (NWR) declined 4.8 per cent to 10
pence. The coal producer said it didn't win the consent of a
required majority of holders to make a coupon payment on
unsecured bonds due July 15. The company had a 30-day
grace period ending Friday.
The Stoxx 600 climbed 1.9 per cent this week through yes-
terday as companies from EON SE to Swiss Life Holding AG
posted better-than-estimated earnings and weaker data on
euro-area growth fueled speculation that the European Central
Bank may need to increase stimulus. The index was heading
for its biggest weekly gain of the year before erasing today's
National benchmark indexes fell in 11 of the 15 western
European markets open today. France's CAC 40 Index dropped
0.7 per cent, and the DAX lost 1.4 per cent.
Markets in Greece, Italy and Austria were closed today for
the Assumption Day holiday. The number of shares changing
hands in Stoxx 600 companies was 36 per cent lower than
the average of the past 30 days, data compiled by Bloomberg
UK, European stocks see weekly gains
US stocks a safe haven
...even after panic selloffs
People pass in front of the New York Stock Exchange in this Monday, March 9, 2009 photo. Worries over Russian troops amassing near the
Ukraine border caused a sharp sell-off in global stock markets on Wednesday. AP
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