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

 


While you were sleeping: Stocks extend slide

While you were sleeping: Stocks extend slide

July 9 (BusinessDesk) - Wall Street slid for a second straight day from record highs as investors locked in profits ahead of the minutes of the latest US Federal Reserve meeting scheduled for release on Wednesday to gauge the timing of a rate increase.

Investors are also focused on the US second-quarter earnings season, unofficially kickstarted with Alcoa’s quarterly results after the market close on Tuesday.

In late afternoon trading in New York, the Dow Jones Industrial Average shed 0.60 percent, the Standard & Poor’s 500 index gave up 0.62 percent, while the Nasdaq Composite Index dropped 1.25 percent.

The slide in the Dow was led by declines in shares of Verizon Communications and those of Boeing, down 1.8 percent and 1.6 percent respectively.

“There’s clearly some profit-taking in names that have done extremely well,” Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, told Bloomberg News. “Some of the stocks have pretty lofty P/E [price-to-earnings] ratios, so if anything does go awry with earnings or guidance, they could have bigger declines.”

The Chicago Board Options Exchange Volatility Index, also referred to as the investors,’ fear gauge, climbed 6.3 percent to 12.04, after a 9.8 percent increase on Monday.

"It’s more that there are no reasons to buy rather than a lot of reasons to sell," Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, told Reuters. "We’ve had such a move recently that buyers are exhausted at a time when we were already due for a pullback."

In a sign that US interest rates might not be destined to move higher just yet, even as the June jobs data were stronger than expected, Minneapolis Fed President Narayana Kocherlakota stressed the importance for policy makers to remain accommodative to further help lower the unemployment rate.

“I currently see the probability of inflation’s averaging more than 2 percent over the next four years as being considerably lower than the probability of inflation’s averaging less than 2 percent over the next four years,” Kocherlakota said in a speech in Minneapolis. “And that’s why I conclude my discussion of inflation by saying that the FOMC is undershooting its price stability goal."

“The current unemployment rate remains above most forecasts of its expected long-run level,” he said. “Personally, I expect that, over the long run, the unemployment rate will converge to just over 5 percent. But I would say that this measure could well overstate the degree of improvement in the US labour market.”

The US sold US$27 billion of three-year notes as the highest auction yield in more than three years drew investors.

In Europe, the Stoxx 600 Index sank 1.4 percent, as did Germany’s DAX and France’s CAC 40. The UK’s FTSE 100 dropped 1.3 percent.

Shares of Air France-KLM slumped 8.7 percent after the airline downgraded its full-year earnings forecast.

“While not representing a turning point in market trends, the June traffic figures published today as well as bookings for July and August nevertheless reflect the over-capacity on certain long-haul routes, notably North America and Asia, with the attendant impact on yields,” the company said in a statement.

“This comes on top of the persistently weak cargo demand and the challenging situation in Venezuela identified in the first quarter.”

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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