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

 


While you were sleeping: Malaysia Air crash spooks markets

While you were sleeping: Malaysia Air crash spooks markets

July 18 (BusinessDesk) - Wall Street declined, while US Treasuries and gold rose, after reports that a Malaysian passenger jet with 295 people on board had been shot down over Ukraine.

Ukraine said pro-Russian rebels shot down the plane, while separatists denied the claims. The crash comes just as the US and the European imposed fresh, and their toughest yet, sanctions on Russia for stoking unrest in eastern Ukraine.

In late afternoon trading in New York, the Dow Jones Industrial Average dropped 0.51 percent, the Standard & Poor’s 500 index slid 0.65 percent, while the Nasdaq Composite Index retreated 0.88 percent. 

Earlier in the day, the Dow set an intraday record high of 17,151.56.

US Treasuries rose, pushing yields on the 10-year benchmark note five basis points lower to 2.47 percent, as investors sought the perceived safety of fixed-income securities.

Gold, another typical safe-haven investment, also advanced. Gold futures for August delivery rose 1.3 percent to settle at US$1,316.90 an ounce on the Comex in New York.

“The market is really acute to geopolitical risk,” Todd Lowenstein, a fund manager at Highmark Capital Management in Los Angeles, told Bloomberg News. “Given where valuations are and the move lately amid all the M&A activity, when you have some geopolitical shocks, people will look for a reason to sell.”

Declines in shares of Intel and Caterpillar, down 2.2 percent and 1.6 percent respectively, led the drop in the Dow. Bucking the trend were shares of UnitedHealth, up 2.6 percent as well as those of Microsoft, up 1.5 percent.

Microsoft said it will slash up to 18,000 jobs as part of a restructuring of the tech giant. The cuts represent about 14 percent of its workforce and most of the jobs to be eliminated were employees inherited in Microsoft’s acquisition of Finnish phone maker Nokia.

In Europe, the Stoxx 600 Index shed 0.9 percent from the previous close. The UK’s FTSE 100 Index dropped 0.7 percent, Germany’s DAX fell 1.1 percent, while France’s CAC 40 declined 1.2 percent.

The latest US economic data were mixed. Jobless claims unexpectedly dropped by 3,000 to 302,000 in the week ended July 12, while the Philadelphia Federal Reserve Bank’s business activity index rose to 23.9 in July, the highest level in more than three years.

Even so, housing starts posted a surprise drop, sliding 9.3 percent to an 893,000 annualised rate in June, down from a 985,000 rate in May.

Analysts pointed to the good news.

"We should focus on jobless claims data,” Joel Naroff, chief economist at Naroff Economic Advisers in Holland, Pennsylvania, told Reuters. “The labour market is tightening, firms are not cutting workers and people are finding jobs."

In a speech to a business group in Kentucky, St Louis Fed chief James Bullard said inflation in the US “seems to be rising again”, adding to his forecast that interest rates may need to rise sooner than the central bank currently is thinking.

“If macroeconomic conditions continue to improve at the current pace, the normalisation process may need to begin sooner rather than later,” he said in his prepared remarks. “The objective is to execute policy normalisation over the next few years without creating excessive inflation or substantial financial stability risks.”

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news