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

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news