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

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news