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

 


While you were sleeping: Adidas wrong-foots

While you were sleeping: Adidas wrong-foots

Aug 1 (BusinessDesk) - Equities on both side of the Atlantic sank amid concern about US interest rate policy, a surprise profit warning from Adidas and a decision by Argentina to default on its debt.

Shares of Germany’s Adidas tanked 15.5 percent after the company unexpectedly downgraded its full-year earnings outlook citing recent developments in Russia and lower demand for its golf products. Rival Nike’s shares also dropped for the second-largest percent decline in the Dow Jones Industrial Average.

“The profit warning could almost have been predicted but the extent of it is catastrophic," Ingo Speich, a fund manager at Union Investment which is the 10th-biggest investor in Adidas with a 1.2 percent stake, told Reuters. "Unfavourable conditions are no excuse. Nike is stealing Adidas' thunder in important markets."

Also weighing on markets was Argentina’s debt default, which reignited concern that it might not take much for euro-zone countries to slip back into a credit crisis.

"The default ties back to the spectre of what's going on in Portugal, and it all reminds people that the euro-zone crisis from years ago may not be fully resolved," Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, Ohio, told Reuters.

In Europe, the Stoxx 600 Index ended the session with a 1.3 percent drop from the previous close. The UK’s FTSE 100 Index fell 0.6 percent, France’s CAC 40 retreated 1.5 percent, while Germany’s DAX shed 1.9 percent.

In late afternoon trading in New York, the Dow Jones Industrial Average slumped 1.62 percent, the Standard & Poor’s 500 index sank 1.87 percent, while the Nasdaq Composite Index dropped 2.04 percent. At one point, the Dow had shed almost 300 points.

Slides in shares of Exxon Mobil and Nike, down 2.9 percent and 2.7 percent respectively, led the decline in the Dow.

Shares of Exxon slid after the company posted a drop in oil and natural gas production.

Shares of Whole Foods Market dropped 2.8 percent after the company cut its sales outlook, while shares of Kraft Foods tumbled 6.2 percent after the company posted a drop in quarterly profit.

Meanwhile, initial claims for unemployment benefits increased by 23,000 to a seasonally adjusted 302,000 in the week ended July 26, from a revised 279,000 the prior week, according to the Labor Department. The data were better than anticipated.

“Employment growth remains healthy,” David Sloan, a senior economist at 4Cast in New York, told Bloomberg News. The reading is “consistent with a strong labour market.”

A government report on Friday is expected to show that US employers hired 231,000 workers in July, after an increase of 288,000 in June.

And in the background was this week’s message from the US central bank that the world’s largest economy continues to recover, which is being interpreted by at least some investors as a signal rate hikes could come sooner than expected.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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