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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

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:

Half Empty: Dairy Prices Drop To Lowest Since August 2009

Dairy product prices fell to the lowest level in more than five years in the latest GlobalDairyTrade auction, led by declines in butter milk powder and whole milk powder. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

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