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

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news