Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: Stocks fall on earnings worry

While you were sleeping: Stocks fall on earnings worry

Jan 9 (BusinessDesk) – Equities on both sides of the Atlantic weakened at the start of the fourth-quarter earnings season in the US that is expected to show tepid growth in corporate profits.

Quarterly earnings are expected to increase by 2.7 percent, according to Thomson Reuters data.

"People are concerned about earnings," Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York, told Reuters.

In afternoon trading in New York, the Dow Jones Industrial Average fell 0.66 percent, while the Standard & Poor's 500 Index declined 0.58 percent, and the Nasdaq Composite Index retreated 0.61 percent.

Alcoa, scheduled to report after the market closes today, is expected to post the strongest annual earnings growth in three years as the price of the aluminum rebounds and after the company closed its most inefficient smelters, according to Bloomberg.

Meanwhile, American small business owners remain worried about the outlook.

The National Federation of Independent Business said its Small Business Optimism Index rose 0.5 to 88 last month. That's the second lowest reading since March 2010.

"The January survey results will be far more enlightening about how the sector views the deal—higher taxes and minimal spending cuts may not be a panacea," NFIB chief economist Bill Dunkelberg said in a statement. "And let’s not forget what is looming on the horizon: a debate over the debt limit and a regulatory avalanche of historic proportions about to spill out into the country."

In Europe, the Stoxx 600 Index finished the day with a 0.1 percent decline from the previous close. National benchmark stock indexes in London and Frankfurt also closed lower, posting 0.2 percent and 0.5 percent drops respectively.

“We have to realize that economic data coming out of the euro zone is going to be very poor,” Bob Parker, senior adviser at Credit Suisse Asset Management in London, told Bloomberg. “I would want to diversify in equities across the euro zone. Markets are going to be frustrating. We are going to see a lot of day-to-day volatility.”

Indeed, unemployment in the euro zone climbed to a record in November, rising to 11.8 percent from 11.7 percent in October, according to Eurostat data released today.

A separate report showed that Germany exports dropped more than expected in November, another sign that Europe's engine economy is struggling under the strains of the ongoing sovereign debt crisis in the euro zone.

Even so, there was a bright spot as confidence in the single currency zone rose more than anticipated last month. An index of executive and consumer sentiment strengthened to 87 from 85.7 in November, according to the European Commission.

And an auction of Irish government drew solid demand.

“Decent demand for Irish bonds bodes well for other peripheral debt,” Mohit Kumar, head of European fixed- income strategy at Deutsche Bank in London, told Bloomberg. “This is a very positive development. Ireland has been taking a number of positive steps that allow it to access the market again.”

In other debt news, Bank of America is looking to sell collection rights on at least another US$100 billion of mortgages after announcing similar deals for more than US$300 billion on Monday, Reuters reported, citing two sources familiar with the situation.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Interest Rates: NZ Dollar Jumps After RBNZ Trims OCR

The New Zealand dollar jumped more than half a US cent after Reserve Bank governor Graeme Wheeler cut the official cash rate by a quarter-point and said the currency needs to be lower, while dropping a reference to criteria that justified intervention. More>>

ALSO:

Drones: New 'World-Class' Framework For UAVs

The rules, which come into effect on 1 August, recognise the changing environment and create a world-class framework that accommodates ongoing development while still ensuring the safety of the public, property and other airspace users. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news