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

 


While you were sleeping: Political risks hit sentiment

While you were sleeping: Political risks hit sentiment

Feb 5 (BusinessDesk) – Stocks on both sides of the Atlantic dropped as concern about Europe's political and financial instability returned, and Wall Street's five-year highs left investors with vertigo in the absence of signs to justify current valuations.

The latest American economic report also disappointed.

Orders to US factories advanced 1.8 percent in December after a revised 0.3 percent slide the prior month, according to Commerce Department data. The gain though fell short of estimates of analysts polled by both Bloomberg News and Reuters, which had predicted increases of 2.3 percent and 2.2 percent respectively.

That report put a damper on enthusiasm stemming from Friday in the US when a slew of data seemed to point to a strengthening recovery.

In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.90 percent, while the Standard & Poor's 500 Index shed 0.91 percent, and the Nasdaq Composite Index declined 1.26 percent.

Shares of Wal-Mart Stores slid, last 1.6 percent lower at US$69.37 after earlier falling as low US$69.13, after JPMorgan Chase reduced its rating on the stock.

Shares of Oracle dropped, last 2.4 percent lower, after the company agreed to buy Acme Packet for about US$2.1 billion. Acme Packet shares soared, climbing 22 percent.

Shares of Herbalife also sank, last down 3.7 percent, after The New York Post reported the company is facing an investigation by the Federal Trade Commission.

In Europe, the Stoxx 600 Index ended the day with a 1.5 percent slide from the previous close. Benchmark stock indexes also dropped in London, Frankfurt and Paris. German stocks were hurt after the nation's second biggest bank, Commerzbank, posted a wider than expected quarterly loss and warned of more trouble ahead.

Spain’s IBEX 35 plunged 3.8 percent amid calls for Prime Minister Mariano Rajoy to resign amid fury over reports of corruption involving the ruling party. Rajoy has denied allegations.

Spanish bonds dropped, sending the nation's 10-year yield up 23 basis points to 5.44 percent.

"The prospect of Rajoy's resignation has roiled the markets," Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York, told Reuters.

"Any fresh political instability in (the) euro zone's most important periphery economy could undermine the sense of investor confidence and send Spanish yields higher, making it much more difficult for the government to implement its austerity measures."

Italy, meanwhile, is plagued by concern about the increasing popularity of Silvio Berlusconi as the nation heads to the polls in three weeks. A potential election victory for the former premier could curb efforts to reform the country's finances.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Auckland Outage: Power Mostly Restored Overnight

Vector wishes to advise that all but 324 customers have been restored overnight. These customers are spread throughout the network in small pockets. The main St Johns feeder was restored around midnight allowing most of the customers in all affected areas to have power this morning. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
More RSS  RSS
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news