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

 

Trade Agreements: TPP Minus US Starting To Gain Ground

The Japanese government is picking up the pace on reviving the Trans-Pacific Partnership trade and investment deal, with talks scheduled next month among the 11 countries left in the pact after the withdrawal by the US after the election of president Donald Trump. More>>

ALSO:

PACER:

Prices Up 2.2%: Annual Inflation Highest In Over Five Years

"Rising petrol prices along with the annual rise in cigarette and tobacco tax lifted inflation," prices senior manager Jason Attewell said. "Petrol prices in New Zealand are closely linked to global oil prices, and cigarettes and tobacco taxes rise in the March quarter each year". More>>

ALSO:

Undertaxed? NZ Income Tax Rate Second Lowest Among Developed Nations

New Zealand workers pay the second smallest portion of their income to the government among developed nations and less than half the average ratio of their Organisation for Economic Cooperation and Development peers. More>>

ALSO:

Cyclone Cook: Round Up Of This Week’s Weather

One of the significant impacts this week was flooding due to excessive rainfall amounts. Rainfall amounts topped out at 350mm over the past 60 hours in parts of northwest Nelson, with 200mm+ measurements recorded about Coromandel Peninsula, and between 150-200mm in the Kaimai Ranges. Rainfall amounts of between 30-50mm were commonplace elsewhere. More>>

ALSO:

Earlier: Batten Down The Hatches For Cyclone Cook

Although fast-moving, Cyclone Cook will be destructive and MetService Expert Meteorologists have issued Severe Wind Warnings for the whole of the North Island apart from Northland... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news