US stocks edge mostly lower after China virus cases spike

Stocks closed lower on Wall Street Thursday as investors turned cautious following a surge in cases of a new virus in China that threatens to crimp economic growth and hurt businesses worldwide.

The modest losses snapped a three-day streak of record highs for the S&P 500 and Nasdaq composite. The selling marked only the second day this month that the market has declined.

Investors largely set aside worries about the economic impact of the virus outbreak the past two weeks. Markets rallied this week partly due to reports that the number of new cases of the new virus in China had declined.

Hopes that the spread of the virus had peaked were dashed Thursday, when China reported a sharp rise in cases and deaths after the hardest-hit province of Hubei took a new approach to classifying and diagnosing the virus.

“We’re in a data-dearth period in the sense that we’re not really going to know fully the effects of the impact of that on Asian and Chinese growth, as well as global growth, for at least several weeks,” said Lisa Erickson, head of traditional investments at U.S. Bank Wealth Management. “You’re just going to see some back-and-forth movement (in the market) until that time.”

The S&P 500 index dropped 5.51 points, or 0.2%, to 3,373.94. The Dow Jones Industrial Average slid 128.11 points, or 0.4%, to 29,423.31. It was down as much as 205 points earlier.

The Nasdaq fell 13.99 points, or 0.1%, to 9,711.97. The Russell 2000 index of smaller company stocks rose 4.36 points, or 0.3%, to 1,693.74.

Markets in Europe and Asia finished mostly lower. The yield on the 10-year Treasury held steady at 1.62%.

The major U.S. indexes wobbled for much of the day as investors weighed company earnings reports and the latest news on the virus outbreak in China.

The change in how Hubei determines and reports cases of the new virus pushed the number of cases worldwide to more than 60,000.

The spike came after two days in which the number of new cases dropped, complicating efforts to understand the trajectory of the outbreak.


Businesses have already been hurting due to the outbreak and more of them are warning that the effects will linger through the year. Organizers of the world’s biggest mobile technology fair cancelled the event, set to take place in Spain, because of health and safety concerns over the outbreak.

Travel-related companies fell broadly Thursday, shedding some of their gains from earlier in the week. Airlines helped pull industrial sector stocks lower. United Airlines fell 1.5%.

MGM Resorts International, which gets about 20% of its revenue from the gambling haven of Macau, pulled its profit forecast for 2020. The stock lost 5.5%. Cruise line operator Carnival slid 2%.

Technology and health care stocks were among the biggest decliners, along with companies that rely on consumer spending. Cisco Systems fell 5.2%, Mylan slid 2.3% and Hanesbrands dropped 2.6%.

Household goods makers, utilities, real estate companies and communication services stocks notched gains.

Fashion company Ralph Lauren warned that the viral outbreak cut into fourth-quarter sales by an estimated $55 million to $70 million. The stock fell 0.6%.

Alaska Air Group bucked the trend, adding 1.5% after the airline said it will cooperate more closely with American Airlines on West Coast service. The airlines asked for government permission to expand revenue-sharing to cover international flights in Seattle and Los Angeles.

Benchmark crude oil rose 25 cents to settle at $51.42 a barrel. Brent crude oil, the international standard, gained 55 cents to close at $56.34 a barrel. Wholesale gasoline was unchanged at $1.58 per gallon. Heating oil was also unchanged at $1.68 per gallon. Natural gas fell 1 cent to $1.83 per 1,000 cubic feet.

Gold rose $7.70 to $1,575.10 per ounce, silver rose 12 cents to $17.60 per ounce and copper rose 1 cent to $2.62 per pound.
The dollar fell to 109.79 Japanese yen from 110.08 yen on Wednesday. The euro weakened to $1.0843 from $1.086.

source: business.inquirer.net

US stocks set another record, the champagne’s still corked

NEW YORK  – U.S. stocks are back at a record. Don’t feel excited? Neither does Wall Street.

After a shaky few months, the stock market has pushed through worries about President Donald Trump’s trade wars, weakening corporate profits and the slowing global economy to set another all-time high. The S&P 500 closed Monday at 3,039.42, eclipsing the previous record set on July 26.


The resurgence belies how much caution still runs through markets, however. The strongest performers in recent months have been companies that pay big dividends and are more likely to hold up during downturns. Investors, meanwhile, remain hesitant to plow their money into stocks.

“We’ve slowly crept up to these all-time highs, but there’s still a lot of uncertainty,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “We’re open to the idea that there could be a reacceleration in global economic growth, but we haven’t seen confirmation yet.”

Some glimmers of increased optimism have shone through the past couple of days, such as improved performance for smaller companies and tech stocks, but plenty of apprehension is still apparent in the catalysts for the S&P 500’s return to a record high:

— Defense has been the best offense.

Of the 11 sectors that make up the S&P 500, the ones seen as the stodgiest have been the best recently. Since July 26, utilities have jumped 6.3%. Profits for these kinds of companies are generally steadier than for the rest of the market, but also slower growing. That’s why they don’t typically do better than the overall market when times are good.

But their relatively high dividends look more alluring now that the Federal Reserve has cut interest rates twice since August, in hopes of protecting the economy. The only other sector in the S&P 500 to rise more than 1.4% is another high-dividend sector, real-estate, which is up 5.6%.

— Stocks THAT RISE WITH A STRONG ECONOMY are scuffling.

If investors were feeling gung ho, they’d likely be piling into areas of the market closely tied to the strength of the economy, which are known as “cyclical” stocks. They are not.

Energy stocks have been the worst performers in the S&P 500 since July 26, down 5%, for example. And tech stocks lagged the S&P 500 from late July until last week, after surging ahead of the rest of the market in the early part of this year.


The struggles tie into all the uncertainty that still exists about how much trade wars will hurt the economy, said Willie Delwiche, investment strategist at Baird. That would hurt cyclical stocks more than defensive stocks.

— Low interest rates DRIVE the market as much as anything else.

In addition to utilities and real-estate investment trusts, homebuilders have been among the market’s best performers recently. Lennar, PulteGroup and D.R. Horton are all up more than 16% in the last three months as lower mortgage rates have drummed up more business for them. The average 30-year fixed mortgage has a rate of 3.75%, down from 4.51% at the start of the year, according to Freddie Mac.

— Euphoria is still lacking.

Investors are still cautious, and they’re not chasing after the rising stock market. In four of the seven weeks through Oct. 16, they pulled more money out of U.S. stock funds and ETFs than they put in, according to the latest estimates from the Investment Company Institute.

Before that, investors yanked a net $101 billion through the year’s first eight months and instead poured money into the safety of bond funds.

To a contrarian, this is actually an encouraging sign. It means stocks could push even higher if investors do decide to get more aggressive with their portfolios. Recent performance suggests they might need a confidence-booster, such as a U.S.-China trade deal.

“We’re not seeing an excessive amount of optimism out there,” said John Hancock Investment Management’s Roland. “That’s one reason the market could still have some legs here. We’re open to that, but we’re just waiting for some confirmation that the backdrop can support earnings growth going forward.” /gsg

source: business.inquirer.net

Stocks climb as markets cap turbulent quarter with calm end

NEW YORK – U.S. stocks climbed on Monday and gave one last nudge to ensure the S&P 500 emerged from yet another tumultuous quarter with a modest gain.

As has been the case throughout the quarter, movements in President Donald Trump’s trade war with China helped drive the market on Monday. Investors found encouragement after China said that its top trade negotiator will lead talks with the United States that are expected to take place next week. The Trump administration also calmed some worries that it may limit U.S. investment in Chinese companies.

The developments helped push technology stocks higher in particular. Those companies often move along with news about trade because of how reliant they are on China as both a customer and a supplier. The S&P 500 climbed 14.95 points, or

0.5%, to 2,976.74.

The Dow Jones Industrial Average rose 96.58, or 0.4%, to 26,916.83, and the Nasdaq composite added 59.71, or 0.8%, to 7,999.34.

The moves left the S&P 500 with a 1.2% gain for the quarter. While that was its smallest quarterly gain this year, the index had been on track for a much worse performance just a month ago.


Trump shocked markets in August when he said he’d raise tariffs on Chinese goods, and the announcement sent stocks and bond yields reeling. The S&P 500 dropped more than 6% in the weeks following July 26, when it set its last record. But stocks began climbing again in September as both sides made conciliatory moves to ease tensions.

Yields, meanwhile, remained lower for the quarter after the Federal Reserve cut short-term rates twice. They were the first rate cuts for the Fed since the financial crisis was swamping the economy in 2008. Across the Atlantic, the European Central Bank was likewise working to keep rates low in hopes of shoring up a slowing global economy.

The yield on the 10-year Treasury dipped to 1.65% from 1.67% late Friday. At the end of the last quarter, it was at 2%.

Like the S&P 500, the Dow also ended the quarter with a gain of 1.2%. The technology-heavy Nasdaq was a touch lower, with a loss of 0.1%.

Small companies took on more damage, as they typically do when investors are worried about the threat of a recession. The Russell 2000 lost 2.8% during the quarter.

Don’t expect the tumult to end with the close of the quarter.

Aside from the U.S.-China talks, the next three months have plenty of events on the schedule to keep markets on edge. Beyond the United Kingdom’s pending exit from the European Union, investors are also waiting to see whether Germany will enter a recession and how the new incoming head of the European Central Bank performs.

Closer to home, the impeachment inquiry into Trump could create even more uncertainty. That puts more pressure on the consumer, the bulwark of the U.S. economy recently, particularly when businesses have become reluctant to spend due to the trade war.

“The consumer’s been enough to keep the economy moving, but things like consumer confidence seem to be plateauing,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management.

In the next few weeks, companies are scheduled to tell investors how much profit they made during the third quarter. Expectations are generally low again, with analysts forecasting a drop of nearly 4% from a year ago. The results, plus what CEOs say about their spending and revenue forecasts, should give a better picture of the economy’s potential direction.

“We need that earnings engine to kick in to drive markets higher,” Roland said.

Last year, the S&P 500 slumped 14% in the fourth quarter for its worst performance in seven years when fear spiked that the Federal Reserve’s plans to keep raising interest rates and a slowing global economy would knock the United States into a recession.

This time around, the Federal Reserve has shifted gears, and many investors expect the central bank to cut rates at least one more time this year. That could help support markets, even with all the potential flashpoints on the calendar.

Benchmark U.S. crude fell $1.84 to settle at $54.07 per barrel Monday. Brent crude, the international standard, fell $1.13 to $60.78 a barrel.

Natural gas dropped 7 cents to $2.33 per 1,000 cubic feet, heating oil lost 4 cents to $1.91 per gallon and wholesale gasoline fell 5 cents to $1.60 per gallon.


Gold fell $33.40 to $1,465.70 per ounce, silver fell 65 cents to $16.90 per ounce and copper fell 2 cents to $2.56 per pound.

Stock markets around the world were mixed during the quarter, as European growth remained stubbornly weak and Hong Kong saw increasingly violent political protests. In Europe, France’s CAC 40 finished with a 2.5% gain for the quarter. Germany’s DAX rose 0.2%, and the FTSE 100 lost 0.2%.

In Asia, Japan’s Nikkei 225 index rose 2.3% for the quarter, while South Korea’s Kospi fell 3.2% and the Hang Seng in Hong Kong lost 8.6%.

The dollar rose to 108.07 Japanese yen from 107.81 yen on Friday. The euro weakened to $1.0902 from $1.0941. /gsg

source: business.inquirer.net

Washington stalemate sinks US stocks; Nasdaq down 2%

NEW YORK CITY—US stocks sank and short-term bond yields jumped Tuesday as the stalemate in Washington over passing a budget and raising the debt ceiling took a deeper toll on financial markets.

Investors sold off a wide range of high-flying tech stocks especially as President Barack Obama toughened his line on negotiating with Republicans, saying he would not bow to extortion.

At the closing bell, the Dow Jones Industrial Average fell 158.75 (1.06 percent) to 14,777.49.



The broad-based S&P 500 sank 20.61 (1.23 percent) to 1,655.51, while the tech-rich Nasdaq Composite Index plummeted 75.54 (2.00 percent) to 3,694.83.

Investors also sold off short-term bonds, sending the yield on the one-month Treasury note to 0.31 percent, its highest level since 2008, up from 0.15 percent Monday.

That reflected growing nervousness about the potential for the government to default on some obligations if the debt ceiling is not hiked by Oct. 17.

“Given that there’s nothing but animosity coming from Washington, people are selling off,” said Michael James of Wedbush Securities.

source: business.inquirer.net

US stocks rise; Apple falls after launching 2 iPhones

NEW YORK CITY—US stocks rose Tuesday on better Chinese economic data and easing concerns about Syria, despite a fall in Apple shares following the launch of two new iPhones.

The Dow Jones Industrial Average jumped 127.94 (0.85 percent) to 15,191.06.

The broad-based S&P 500 increased 12.28 (0.73 percent) to 1,683.99, while the tech-rich Nasdaq Composite Index put on 22.84 (0.62 percent) at 3,729.02.

Technology icon Apple, the largest US company by market capitalization, suffered one of the biggest declines among large companies, falling 2.3 percent after chief executive Tim Cook and other top officials unveiled two new iPhones.

Apple fielded a top-line iPhone 5S and a lower-cost iPhone 5C aimed at competing with rival low-cost smartphones, most of which use Google’s Android operating system.

Some analysts expressed disappointment with the launch. Bank of America said the smartphones would have difficulty competing in the lower-end market “unless Apple is willing to give up subsidy/margin, which it doesn’t typically do.”

Meanwhile, the broader market surged to a second straight day of solid gains.

China’s industrial production rose in August at its fastest rate in 17 months, according to official data providing further evidence of a pick-up in the world’s second-largest economy.

Tuesday’s gains came as investors continued to hope that a proposal by Russia to place Syria’s chemical weapons under international control could avert a US military strike.

The operator of the Dow index, S&P Dow Jones Indices, announced it would drop Alcoa, Bank of America and Hewlett-Packard from the 30-stock blue-chip index on September 23, replacing them with Goldman Sachs, Nike and Visa.

The Dow cited the low stock values of the companies that were dropped and a “desire to diversify the sector and industry group representation of the index.”

Goldman Sachs rose 3.5 percent, Nike jumped 2.2 percent and Visa increased 3.4 percent. Alcoa slipped 0.3 percent, Bank of America gained 0.9 percent and Hewlett-Packard fell 0.4 percent.

Video streaming service Netflix surged 6.4 percent following a deal with British cable operator Virgin Media to make the service available to subscribers. A Citi note said the news marked the first time Netflix has been integrated into a pay-TV offering.

Apparel maker PVH, which owns the Tommy Hilfiger and Calvin Klein brands, dropped 5.6 percent after a full-year earnings forecast came in at $7 per share, below the $7.14 seen by analysts.

Bond prices fell. The yield on the 10-year Treasury rose to 2.96 percent from 2.90 percent Monday, while the 30-year increased to 3.89 percent from 3.84 percent. Prices and yields move inversely.

source: business.inquirer.net

US stocks rise at hint of Syria deal

NEW YORK CITY—US stocks Monday rose helped by optimism that a military strike on Syria might be avoided.

At the closing bell, the Dow Jones Industrial Average was up 138.85 (0.93 percent) to 15,061.35.

The broad-based S&P 500 increased 16.39 (0.99 percent) to 1,671.56., while the tech-rich Nasdaq Composite Index put on 46.17 (1.26) at 3,706.18.

Stocks opened higher Monday morning after strong Chinese export data suggested better times for the world’s second-biggest economy.

The rally was given further strength by a Russian proposal to put Syrian chemical weapons under international control.

The US reacted cautiously to the plan, which comes as President Obama faces a skeptical reception in Congress to plans to launch a military strike on Syria. Stocks moved higher at mid-day and stayed fairly high through the close.

“The market seems to be anticipating that a strike can be avoided and a deal can be worked out,” said Peter Cardillo, chief market economist at Rockwell Global Capital.

source: business.inquirer.net

US stocks sink amid central bank anxiety

NEW YORK—US stocks ended the day solidly lower Tuesday after the Bank of Japan’s status-quo policy decision revived concerns about the winding down of central bank stimulus measures.

The Dow Jones Industrial Average fell 116.57 (0.76 percent) to 15,122.02.

The broad-based S&P 500 dropped 16.68 (1.02 percent) to 1,626.13, while the tech-rich Nasdaq Composite Index sank 36.82 (1.06 percent) to 3,436.95.

The losses came after the Bank of Japan opted to maintain its aggressive asset-purchase program unchanged, saying the world’s third-largest economy was “picking up.”

“The expectation was that Japan would keep increasing it,” said Andrew Fitzpatrick of Hinsdale Associates. “There was a sort of a built-in belief that there was going to be more there.”

The restraint in Japan also raised questions about the US Federal Reserve’s future direction of policy measures ahead of next week’s Federal Open Market Committee meeting.

The Fed has signaled it wants to begin to craft a plan for tapering its $85 billion a month bond-purchase program.

“The threat of the easy money being taken away is enough to scare investors,” said David Levy, Kenjol Capital Management.

Banking stocks recorded outsized losses, including Morgan Stanley (down 3.9 percent) Goldman Sachs (down 2.5 percent) and Wells Fargo (down 1.5 percent).

Other large declines came from General Motors (down 2.3 percent) and American International Group (down 2.2 percent).

Sprint Nextel rose 2.4 percent after SoftBank raised its bid in the hotly contested acquisition battle for the US telecom. Rival bidder Dish Network was up 0.8 percent.

Google shed 1.2 percent after announcing the acquisition of Israeli traffic and mapping application Waze for an undisclosed sum. Several media reports put the price at more than $1 billion.

News Corp. slipped 0.9 percent after shareholders approved a measure to divide the company in two. The company said it is on track to complete the split June 28.

Yoga attire manufacturer Lululemon Athletica plummeted 17.5 percent after announcing that chief executive Christine Day will step down once a new chief is identified.

Bond prices rose. The yield on the 10-year US Treasury slipped to 2.20 percent from 2.22 percent late Monday, while the 30-year dropped to 3.33 percent from 3.37 percent. Bond prices move inversely to yields.

source: business.inquirer.net

US stocks follow global markets lower

WASHINGTON — Wall Street stocks opened lower Wednesday following a global rout as weaker-than-expected data on private jobs creation underscored weakness in the US economy.

Five minutes into trade, the Dow Jones Industrial Average was down 43.17 points (0.28 percent) at 15,134.37.

The broad-based S&P 500 lost 4.54 (0.28 percent) at 1,626.84, while the tech-rich Nasdaq Composite fell 8.49 (0.25 percent) to 3,436.77.

Providing a possible picture for the official May job creation and unemployment numbers to be released Friday, payroll firm ADP reported Wednesday that the US private sector added 135,000 jobs in May, less than the 157,000 jobs analysts had expected.

source: business.inquirer.net

US stocks lower on earnings, European gloom

NEW YORK—US stocks closed sharply lower Wednesday in the wake of disappointing earnings reports and a 5.5 percent plunge in Apple shares, along with dreary economic sentiment in Europe.

At the closing bell, the Dow Jones Industrial Average dropped 141.38 (0.96 percent) to 14,615.40.

The broad-based S&P 500 sank 22.85 (1.45 percent) to 1,551.72, while the Nasdaq Composite Index nose-dived 60.29 (1.85 percent) to 3,204.34.

The losses came after a disappointing earnings report from Bank of America sent it and other banking shares lower.

Apple also fell considerably after a supplier slashed its profit guidance, suggesting, analysts said, slow iPhone and iPad sales at Apple itself.

The US retreat also followed a day of losses in Europe amid speculation of a German credit rating downgrade and commentary from the head of the Bundesbank predicting that the European economic slump would last a decade more.

source: business.inquirer.net

US stocks rise on hopes of Greece debt deal

NEW YORK - US stocks finished higher Thursday, led by a 1.2 percent gain in the Nasdaq buoyed by reports that Greece had achieved the minimum support needed to push its huge private-debt writeoff through.

At the closing bell the Dow Jones Industrial Average was up 69.78 points (0.54 percent) to 12,907.11.

The broad-based S&P 500 added 13.27 (0.98 percent) to 1,365.90, while the tech-rich Nasdaq Composite rose 34.73 points (1.18 percent) to 2,970.42.

While an official statement was still awaited, a Greek government source said that enough private creditors had agreed to the debt swap program ahead of the 2000 GMT Thursday deadline to allow it to go ahead, opening the door to a broader new rescue of the teetering Greek economy.

ATHENS - Greece seemed close to clinching a high-stakes debt swap Thursday as a deadline for bondholders to accept huge losses on their Greek holdings came and went opening the way for an urgent bailout.

Hours before the cut-off, a government source said that participation had already passed 75 percent, the minimum level sought by Athens for the deal to go through.

With the threshold met, Greece was now expected to press on towards unlocking a 130-billion-euro bailout from the European Union and IMF, a process that might include resorting to so-called collective action clauses Athens introduced to force holdouts to accept the deal.

By using the clauses, Greece would get even closer to the 95 percent participation rate the EU and IMF said is necessary to reduce Greek debt to a sustainable level of 120 percent of gross domestic product in 2020.

But the clauses could also trigger anti-default insurance contracts, known as credit default swaps, whose net value was estimated at 3.2 billion euros in February.

The Greek government will make an announcement on the swap at 0600 GMT on Friday, a finance ministry source said earlier.

And eurozone finance ministers were set to review the swap in a conference call later Friday, and weigh in particular the necessity to trigger the clauses or not.

Talk that the 75 percent participation level was close to being reached trickled out throughout the day helping send stock markets sharply higher across the globe and giving leaders some confidence that a page was about to be turned.

Italian Prime Minister Mario Monti said over 60 percent of private creditors had accepted the debt swap and the global bank association that led the initiative said a deal was close at hand.

"I'm optimistic that there's going to be an agreement in the next few hours," said Charles Dallara, managing director of the International Institute of Finance (IIF) and chief negotiator for the banks involved in the debt writedown.

The writedown is the biggest attempted so far, overshadowing Argentina's $82-billion default in 2002, the equivalent of 73 billion euros at the time.

It is designed to erase more than 100 billion euros ($132 billion) from Greece's near and midterm debt and replace it with new maturities.

The exercise is meant to make repayment of the debt, currently at over 350 billion euros, more sustainable in the immediate future, thereby giving the struggling Greek economy much needed breathing room.

"Tonight at midnight, a procedure of historic character reaches completion. An operation of unprecedented size and complexity to drastically cut Greek state debt," Finance Minister Evangelos Venizelos told parliament.

Officials would need two hours after the deadline to determine the level of participation, Greek news reports said.

Greek Prime Minister Lucas Papademos said he expected maximum participation as a take-up too low would ultimately mean an even greater danger of a disorderly default that the IIF warned could cost eurozone nations one trillion euros.

European stock markets posted strong gains on Thursday following rises across Asia, and Wall Street also rose on optimism that Greece's debt swap would be successful.

Directors from the International Monetary Fund have tentatively planned to meet to weigh a new loan for Greece on March 15, spokesman Gerry Rice said Thursday.

Greece and the IIF have warned that a disorderly default could occur as quickly as March 20, when Athens is due to reimburse 14.4 billion euros in debt.

The IIF report warned that if the debt swap deal failed, it could do serious damage to the eurozone and even the global economy.

Greece's own stock exchange picked up 2.78 percent in late afternoon trade.

"Global equity markets are rallying in front of the deadline for the private-sector involvement in the Greek debt swap plan, reflecting an expectation that the deal will get done and that a disorderly default will be avoided," said Briefing Research. — Agence France Presse

source: gmanetwork.com