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


While you were sleeping: Wall Street fears rate increase

While you were sleeping: Wall Street fears rate increase

July 8 (BusinessDesk) - Wall Street fell, pushing bench market indexes from record highs, on concern the US Federal Reserve might lift its key interest rate sooner than expected amid consistent signs of solid growth in the world’s largest economy.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.37 percent, the Standard & Poor’s 500 index shed 0.42 percent, while the Nasdaq Composite Index slumped 0.72 percent. Both the Dow and the S&P 500 had ended July 3 with record closing highs, while markets were closed on July 4 for the Independence Day holiday.

Declines in shares of Goldman Sachs and those of UnitedHealth, down 1.4 percent and 1.3 percent respectively, paced the slide in the Dow.

Following last week’s better-than-expected government jobs report, some market watchers are adjusting their forecasts. The Fed will raise its benchmark rate in the third quarter of 2015, rather than the first three months of 2016, Goldman Sachs Chief Economist Jan Hatzius wrote in a report on Sunday, according to Bloomberg News.

“There’s a risk the market may be underestimating the Fed’s tightening path,” Rainer Guntermann, a fixed-income strategist at Commerzbank in Frankfurt, told Bloomberg News.

Concern about US rates climbing sooner than previously expected also hurt gold. Gold futures for August delivery fell 0.3 percent to settle at US$1,317 an ounce on the Comex in New York.

Meanwhile, there is some investor anxiety in the market on the eve of the US second-quarter earnings season with benchmark indexes trading near record highs. The Dow has gained 3.8 percent in 2014, and is trading about 17,000 points, while the S&P 500 has added 8.1 percent in the same period.

Alcoa is scheduled to report its quarterly results after the market close on Tuesday.

"The markets have moved robustly higher and significantly higher than many expected for the first six months of this year, so earnings need to be pretty much spot on or better than expected and anything less than that will lead to a period of underperformance," Peter Kenny, CEO of Clearpool Group in New York, told Reuters.

Profits are forecast to grow 6.2 percent for the quarter, according to Thomson Reuters data.

Shares of Archer Daniels Midland rose, last trading 1.9 percent higher at US$46.66, after the US company said it agreed to buy Wild Flavors, a Swiss food ingredients maker, for 2.3 billion euros (US$3 billion).

In Europe, the Stoxx 600 Index shed 0.9 percent. The UK’s FTSE 100 slid 0.6 percent, Germany’s DAX dropped 1 percent, and France’s CAC 40 sank 1.4 percent.

There were further signs of weakness in Germany, the euro-zone’s largest economy. A report on Monday showed German industrial output slid for a third month in May.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade & Retail: Chinese Disaster Spells Quiet Season For NZ Fireworks Sales

In August, two massive explosions at a warehouse at the port in the port of Tianjin, Northern China, killing more than a hundred people and devastating large areas of the city. In the wake of the disaster, Chinese authorities rushed to regulate the distribution of all dangerous goods... More>>



Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news