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

 


While you were sleeping: Stocks extend decline

While you were sleeping: Stocks extend decline

Feb 22 (BusinessDesk) – Wall Street extended losses for a second day amid concern the Federal Reserve's stimulus for the US economy might end sooner than expected, while the latest data on euro zone services and manufacturing output showed a larger-than-expected contraction.

Minutes from the latest Fed meeting called into question the size and duration of the central bank's bond-buying program at a time when the signals about the recovery in the world's largest economy remain mixed, while the euro zone shows signs of further trouble.

A report today showed the Fed’s Philadelphia general economic index slid to minus 12.5 in February, the lowest reading since June, from minus 5.8 in January.

In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.54 percent, the Standard & Poor's 500 Index declined 0.75 percent, while the Nasdaq Composite Index weakened 1.15 percent. The S&P 500 closed at a five-year high on Tuesday.

“People are taking some profits and watching to see what the next catalyst is,” Neil Massa, senior equity trader at Boston-based John Hancock Asset Management, told Bloomberg News. “It’s a healthy sell off. We’ve gone up so much, it’s a good opportunity to take a breather. I don’t think it’s a sign of a continuing trend.”

Earnings from companies including Wal-Mart and Safeway showed there that are plenty of reasons for the good times to last. Better-than-expected results bolstered shares of both retailers, sending Wal-Mart up 2.7 percent, while those of Safeway soared 13 percent.

But there were worrisome signals too. Shares of VeriFone Systems tanked, last down 39.7 percent, as sluggish demand in Europe hurt the company's profit outlook.

Indeed, a composite index of factory and services output in the euro zone weakened to 47.3 this month from 48.6 in January, according to Markit Economics. Economist' surveys by Bloomberg and Reuters both had forecast a reading of 49.

“A steepening rate of decline in February is a disappointment, and suggests that the euro zone is on course to contract for a fourth consecutive quarter in the first three months of the year," Chris Williamson, chief economist at Markit, said in a statement.

Economies differ vastly across key member states, the data showed. The difference between France and Germany is the largest since the survey began in 1998, according to Markit.

"Germany is on course to grow in the first quarter, recovering from the 0.6 percent GDP fall seen in the fourth quarter, possibly expanding by as much as 0.4 percent," Williamson said. "In contrast, Frances’s downturn is likely to deepen, bringing the euro area’s second-largest member more in line with the periphery than with the now solitary-looking German ‘core’.”

Europe's Stoxx 600 Index ended the session with a 1.5 percent slide from the previous close. National key stock indexes also dropped in London, Frankfurt and Paris, shedding 1.6 percent, 1.9 percent and 2.3 percent respectively.

Italy's key benchmark dropped 3.1 per cent as uncertainty about the outcome of this weekend's national elections continues to rise.

The euro weakened as well, retreating 0.6 percent against the greenback, while falling 1.3 percent against the yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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