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

 


While you were sleeping: US home sales, Fed meeting

While you were sleeping: US home sales, Fed meeting

Jan 28 (BusinessDesk) – US stocks and bonds fell as the Federal Reserve gears up to start its final two-day meeting with Ben Bernanke at the helm, and is expected to announce a further tapering to its monthly bond-buying program.

At its last meeting in December, the Fed said it would ease its program by US$10 billion to US$75 billion in January. It is widely expected to continue along the same rate. Policy makers begin a two-day meeting on Tuesday.

“The Fed will cut US$10 billion at every meeting if the economy stays where it is right now,” Charles Comiskey, head of Treasury trading in New York at Bank of Nova Scotia, one of 21 primary dealers that trade with the Fed, told Bloomberg News.

The yield on the US 10-year bond rose 3 basis points to 2.74 percent.

Wall Street also slid. In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.46 percent, the Standard & Poor’s 500 Index slid 0.76 percent, while the Nasdaq Composite Index weakened 1.59 percent. Declines in shares of Visa, last down 2.3 percent, and those of Goldman Sachs, last 2.2 percent weaker, led the drop in the Dow.

By and large US corporate earnings have been solid, underpinning optimism that the American economic recovery is translating into improved profits. Of the 125 S&P 500 companies that posted earnings so far this season, 74 percent have beaten analysts’ estimates for profit and 68 percent have exceeded projections for sales, according to Bloomberg.

Among those surpassing expectations was Caterpillar. Shares climbed, last up 4.2 percent, after the company provided an outlook that pleased investors and announced a US$10 billion stock buyback.

“We see some signs of improvement in the world economy, which should be positive for sales in our Construction Industries and Power Systems segments,” Caterpillar Chairman and Chief Executive Officer Doug Oberhelman said in a statement. “However, despite our expectation that mine production will continue to increase, we expect mining companies to further reduce their capital expenditures in 2014.”

“We continue to be cautious and are making the tough decisions necessary to better position us down the road when economic conditions improve and our sales rebound,” Oberhelman said.

Even so, the latest US economic data were mixed. Markit’s preliminary services sector PMI increased to 56.6 in January, up from 55.7 in December.

"US service providers reported a busy January, providing an important signal that the economy remains in good health at the start of the year," Markit chief economist Chris Williamson said in a statement. "Growth of business activity picked up from the already-robust pace seen in December, and optimism about prospects for the year ahead rose to one of the highest levels we've seen since the financial crisis."

The latest report on housing was disappointing. New home sales fell more than expected, slumping 7 percent to a 414,000 annualized pace in December, from a revised 445,000 rate the previous month, according to Commerce Department data.

In Europe, the Stoxx 600 Index sank 0.8 percent. France’s CAC 40 fell 0.4 percent, Germany’s DAX retreated 0.5 percent, while the UK’s FTSE 100 slumped 1.7 percent.

Germany’s Ifo institute’s business climate index rose to a higher-than-expected 110.6 in January, up from 109.5 in December.

"January's Ifo survey suggests that the German economy has started the new year with a reasonable amount of momentum," Jonathan Loynes, chief European economist at Capital Economics, told Reuters.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

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:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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