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

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news