US stocks edge down on virus woes, slowing economy

NEW YORK - The S&P 500 Index closed slightly lower on Monday after erasing early gains as worries about the Delta variant of the coronavirus and a slowing US economy overshadowed optimism around more fiscal stimulus and a strong second-quarter earnings season.

Federal Reserve Governor Christopher Waller said on CNBC late in the session that the Fed could start to reduce its support for the economy by October if the next two monthly jobs reports each show employment rising by 800,000 to 1 million, as he expects. 

He also suggested the Fed could announce in September it would start to reduce its monthly bond purchases, which could lift yields again - not the best news for the stock market. 

Data earlier in the day showed that although US manufacturing grew in July, its pace slowed for a second straight month as spending rotated back to services from goods, and shortages of raw materials persisted. 

The softer-than-expected data also sent US bond yields to their lowest since July 20 and knocked the blue-chip Dow off an intra-day record high hit in early trading. 

“An issue for the market... is the rise of the growth scare", said Rob Haworth, senior investment strategist at US Bank, "Whether it's more restrictions in China with infections rising in 14 provinces now, or questions about how far is the US going to have to go with mask mandates.”

Only four of the 11 S&P sectors traded higher by market close, among them utilities and real estate generally considered safe bets at a time of uncertainty.

The Dow Jones Industrial Average fell 97.31 points, or 0.28 percent, to 34,838.16, the S&P 500 lost 8.1 points, or 0.18 percent, to 4,387.16 and the Nasdaq Composite added 8.39 points, or 0.06 percent, to 14,681.07. Square Inc, the payments firm of Twitter Inc co-founder Jack Dorsey, jumped after it said it would purchase Australian buy now, pay later pioneer Afterpay Ltd for $29 billion. 

With manufacturing activity data coming in weaker than expected, investor focus now turns to services sector data on Wednesday and the Labor Department's monthly jobs report on Friday.

After mixed quarterly reports from technology behemoths last week, all eyes this week are on earnings from companies including Eli Lilly and Co, CVS Health Corp and General Motors Co.

Volume on US exchanges was 8.80 billion shares, compared with the 9.77 billion average for the full session over the last 20 trading days. 

Declining issues outnumbered advancing ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 1.05-to-1 ratio favored advancers.

The S&P 500 posted 76 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 98 new highs and 67 new lows.

-reuters

Dow, S&P 500 end modestly higher on hopeful signs in fiscal impasse

NEW YORK - The Dow and S&P 500 rose on Wednesday as Republicans and Democrats in Congress showed early signs of a possible break in the impasse, and U.S. President Barack Obama invited both sides for talks about ending the government shutdown, now in its ninth day.



Wall Street rebounded in the afternoon after the Nasdaq fell as much as 1 percent, with defensive sectors such as telecommunications and utilities rising on the day.



The Nasdaq, however, closed lower for a third day, pressured as investors sold this year's winning tech stocks including Netflix Inc and Fastenal Co.



"With the uncertainty over the government shutdown and the shaving away of the GDP each day, unfortunately, some investors will start selling these things that were good for the year rather than pulling off the laggards. And tech has been performing very highly," said Michael Matousek, head trader at U.S. Global Investors in San Antonio, Texas.



In the latest Washington developments, Republicans and Democrats floated the possibility of a short-term increase in the debt limit to allow time for broader negotiations on the budget.



At the same time, Obama began inviting lawmakers from both parties to the White House for meetings to discuss the government shutdown and raising the debt limit.



The slight shift in tone was aided by a column by House Budget Committee Chairman Paul Ryan of Wisconsin, who urged a negotiated end to the stalemate but did not mention Republican demands for linking changes in the federal healthcare law with government funding.



The market was also relieved that Obama nominated Federal Reserve Vice Chairwoman Janet Yellen to run the world's most influential central bank, providing some relief to markets that would expect her to tread carefully in winding down economic stimulus.



Yellen, an advocate for aggressive action to stimulate U.S. economic growth through low interest rates and large-scale bond purchases, would succeed Fed chairman Ben Bernanke, whose second term ends on January 31.



The Dow Jones industrial average ended up 26.45 points, or 0.18 percent, at 14,802.98. The Standard & Poor's 500 Index rose 0.95 point, or 0.06 percent, at 1,656.40. The Nasdaq Composite Index was down 17.06 points, or 0.46 percent, at 3,677.78.



The CBOE Volatility Index, a measure of investor anxiety, continued to rise, hitting 21.34, before retreating to 19.60. A level above 20 is generally associated with increasing concern about the near-term direction of the market.



A poll by Reuters showed Wall Street strategists expect the market to rebound toward the end of the year.



The S&P 500 dropped 1.2 percent on Tuesday, its worst decline since August 27, sending the benchmark index to its lowest level since September 6 as traders cashed in gains in some of the year's highest performing tech stocks.



The Federal Reserve's shock decision last month not to reduce its support for the U.S. economy was a "relatively close call" for policymakers, according to minutes of the meeting that also suggested there was still broad support to trim bond-buying this year. Since last month's meeting, the outlook for scaling back bond purchases has grown cloudier.



"Between slow growth and the shutdown, it's clear we're in troubled times. I wouldn't expect any tapering for quarters from now," said Todd Schoenberger, managing partner at LandColt Capital in New York.



In company news, Darden Restaurants Inc shares jumped 7.1 percent to $49.57 after the Wall Street Journal, reported hedge fund Barington Capital LP had taken a 2.8 percent stake in the owner of the Olive Garden and Red Lobster restaurants.



Shares of Hewlett-Packard Co rallied nearly 9 percent to $22.60 after Chief Executive Meg Whitman said she expects revenue to stabilize in 2014 with "pockets of growth" before the business accelerates again in 2015.



Yum! Brands Inc fell 6.8 percent to $66.48 after the KFC parent warned it will take longer than expected for restaurant sales to rebound in China, which accounts for more than half the company's overall operating profit.



Volume was light, with about 5.9 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.1 billion shares.

source: interaksyon.com

Is Fed ready to begin the great taper? Markets say yes

WASHINGTON, September 15, 2013 (AFP) - Is the Federal Reserve ready to put the Great Recession behind it? Is the US economy prepared for it?

The markets think so, as the Fed's policy board prepares to meet on Tuesday and Wednesday to decide a momentous step: whether they begin cutting back its stimulus for the economy, $85 billion a month pumped in via bond purchases to fuel the engine.

Four months after Fed Chairman Ben Bernanke first suggested that the central bank could start to taper its stimulus program, called quantitative easing (QE), sometime this year, most expectations are that the Federal Open Market Committee (FOMC) will take the step.

And with Bernanke expected to step down at the end of January, many believe he needs to set the policy path now, rather than having it delayed for months until his successor settles into the job.

The prospect of less easy money from the Fed has already taken US stocks down from their all-time highs, and sent market interest rates climbing sharply. The yield on the benchmark 10-year Treasury bond has nearly doubled in four months, from 1.6 percent to 3.0 percent.

The anticipation has also wreaked havoc in emerging markets.

A pullout of foreign capital, driven by falling returns, turned into a flood outward when US bond yields rose. That sent authorities in countries like Indonesia, India and Turkey into a panic over their plummeting currencies.

And although that has drawn warnings to the Fed from around the world to not act too precipitously, analysts say the only question surrounding the taper is when, and how fast.

In his effort to remove any obscurity from Fed communications -- to make sure that everyone understands clearly what FOMC members are thinking -- Bernanke has set the course firmly to taper.

On May 22 he told a congressional hearing that the Fed could begin cutting the QE bond purchases "in the next few meetings" of the FOMC, while adding the condition, "If we see continued improvement, and we have confidence that that is going to be sustained."

Three weeks later he was more precise, saying the cutback could start "later this year" and be completely wound up by mid-2014.

But by July he was more cautious, voicing a worry over how government spending cuts might slow the economy through the rest of the year.

The minutes to the end-July FOMC meeting echoed that shift. Several members wanted to go ahead with the taper, while others counseled "the importance of being patient".

Economic data has backed both views. At the end of August the official estimate of US economic growth in the second quarter was raised to a solid 2.5 percent.

The August jobs report put the unemployment rate at 7.3 percent, compared with 8.1 percent a year earlier, and data on corporate and government layoffs has steadily improved.

But the report also showed a significant slowdown in new job generation for the June-August period. Gains in the unemployment rate were largely from the number of people dropping out of the jobs market altogether.

In addition, the rise in interest rates appears to have slowed the rebound of the property sector, and fresh retail sales data Friday suggested that, with the exception of buying new cars, US consumers were being very cautious about opening their wallets.

"Businesses aren't laying off workers -- the layoff rate is at a record low and initial unemployment insurance claims are trending down -- but they aren't hiring many, either," said Mark Zandi, chief economist at Moody's Analytics.

But as Zandi points out, the economy continues to heal, and the Fed's bond purchases -- aimed at holding down long-term interest rates -- have less impact as time passes.

Most analysts say there is not enough economic bad news for Bernanke to reverse course.

But the FOMC could cut its bond purchases by a small amount -- $5 to $20 billion out of the $85 billion total -- and then hold off on more cuts to see where the economy goes, analysts say.

Or it could put off the decision to one of the FOMC's two remaining meetings this year.

"The Fed will likely hold off on tapering at next week's meeting and move in December," said economists at IHS Global Insight in a report Friday, taking a minority view.

"The jobs market is simply too uncertain and there are risks on the horizon from Syria and congressional fiscal fights."

source: interaksyon.com

PSEi slips below 6,000-mark on fears of US strike against Syria

Philippine share prices fell sharply on Wednesday to pull down the benchmark index below the 6,000-mark as renewed concern over an imminent US military strike against Syria weighed on investor sentiment.

At the Philippine Stock Exchange, the local barometer dropped 115.58 points or 1.90 percent to finish at 5,968.33. The PSE index (PSEi) shed as much as 2.4 percent in early trade.

All counters shed at least a percent each led by the holding firm sub-index with a decline of 2.29 percent. There were three losers for every gainer, while 48 issues were unchanged. A total of 976.52 million shares worth P6 billion changed hands.

Most actively traded stocks were SM Investments, PLDT, Ayala Corp, Ayala Land and GT Capital. Top advancers were iRipple, Maybank ATR and Century Properties, while the biggest losers were ATN B, Medco and RFM.

"Renewed concerns in the Middle East and the strengthening dollar scared off the investors," said Astro del Castillo, managing director of First Grade Finance Inc.

"Moving forward, the concerns now will be the inflationary effect towards growth especially if the US will pursue such attack on Syria. It will possibly impede global growth," del Castillo said.

Coming off the Labor Day public holiday, US stocks closed higher following the release of favorable economic reports on manufacturing and construction spending, but trimmed gains after key US Congressional leaders, including House Speaker John Boehner, backed President Barack Obama's call for military action against Syria.

The US had condemned Syria’s chemical attack that killed nearly 1,500 people in Damascus.

Overnight, the Dow Jones industrial average rose 23.65 points or 0.16 percent, to 14,833.96.

source: interaksyon.com

Obama 'cliff' remarks spark US stocks sell-off

NEW YORK - US stocks tumbled Wednesday as President Barack Obama challenged Republicans to accept tax increases for the wealthy in a deal to avert the year-end fiscal cliff.

After opening higher, helped by Cisco Systems's strong earnings, share prices slid and then turned more sharply downward after Obama laid out his terms for a deal in his first news conference since his re-election.

Wall Street stocks closed at their lowest level in more than four months after Obama drew a hard line against Republicans in the battle for a compromise to avoid automatic spending cuts and tax increases that take effect in January.

"The president's statements failed to inspire investor confidence, thus resulting in an afternoon sell-off," said Briefing.com analysts.


The Dow Jones Industrial Average dropped 185.23 points (1.45 percent) to 12,570.95, its lowest close since June 26.

The broad-market S&P 500 lost 19.04 (1.39 percent) at 1,355.49, while the tech-rich Nasdaq Composite gave up 37.08 (1.29 percent) at 2,846.81.

Bank of America led the Dow rout, sliding 3.6 percent, followed by General Electric, down 3.2 percent.

Dow component Cisco was the sole blue-chip gainer, jumping 4.8 percent after its 48 cents earnings per share for the fiscal first quarter beat analyst expectations by two cents.

Abercrombie & Fitch, the retailer of trendy clothing for youth, soared 34.5 percent after turning in a 40 percent jump in third-quarter profit and sharply increasing its forecasts for the full year.

Office supplies chain Staples added 2.6 percent after reporting an expected quarterly loss due to impairment charges mainly related to its struggling European business.

Excluding that, its earnings per share came in flat, and around analyst expectations.

On the Nasdaq, Dell added 1.9 percent and Facebook gained 12.6 percent, despite a lifting of a share-sale ban for insiders, while Apple fell 1.1 percent.

Starbucks dropped 2.9 percent after announcing it would buy tea chain Teavana for $620 million.

Bond prices were mixed.

The 10-year US Treasury yield was unchanged from Tuesday at 1.59 percent, and the 30-year rose to 2.73 percent from 2.72 percent.

Bond prices and yields move inversely.

source: interaksyon.com

US Stock Market Bounces Back; Big Banks, Lenders Move Higher

NEW YORK (AP) – The US stock market bounced back Friday, a day after suffering its second-worst loss this year. Bank of America, JPMorgan Chase and other big lenders posted solid gains even though many of them had their credit ratings cut the day before.

Analysts said the downgrades from Moody's Investor Service late Thursday had been expected for months and removed some of the uncertainty that had been weighing on bank stocks.

"It's been like a cloud over the sector,'' said Brian Gendreau, market strategist with the broker Cetera Financial. "And look at who's going up: Bank stocks. There are obviously some people who thought it would be much worse.''

The Dow Jones industrial average gained 67.21 to close at 12,640.78. Bank of America gained 1.5 percent, or 12 cents, to $7.94, one of the best showings of the 30 stocks in the Dow.

In a note to clients, analysts at the investment bank Keefe Bruyette & Woods called Morgan Stanley "the clear winner.'' Some analysts had expected Moody's to lower Morgan Stanley's rating by three notches, instead of the two-notch cut it received.

Bank stocks rose across the board. Morgan Stanley rose 18 cents to $14.14. JPMorgan Chase climbed 48 cents to $35.99.

The Standard & Poor's 500 index rose 9.51 points to 1,335.02 and the Nasdaq composite index climbed 33.33 points to 2,892.42. The gains turned the Nasdaq positive for the week.

Information technology stocks had the strongest gains of the 10 industry groups tracked by the S&P 500 index, followed by health care stocks and banks. The gains were small but widespread. All 10 sectors rose. Of the 30 stocks in the Dow, just two fell.

The Dow and S&P 500 finished the week lower, their first week of losses since June 1. The biggest drop of the week came Thursday, when a trio of weak manufacturing reports stirred fears about the global economy. The Dow lost 251 points, its second-steepest fall this year. The worst was June 1, after a dismal US jobs report rattled markets.

Even with two days of deep losses, the S&P 500 is still up 1.9 percent this month. To Gendreau, it looks like investors have been overreacting to recent economic reports. "The market is getting jerked around,'' he said. "The economic data point to a softening economy, but we've had a softening economy for three years now.''

Among other stocks making big moves:

– Facebook surged 3.8 percent, rising $1.21 to $33.05. A Nomura analyst started covering the social-networking company with a price target of $40 and a "buy'' recommendation. Brian Nowak said Facebook could make more money through charging companies for pages. He also thinks the stock looks cheap in comparison to what investors paid for Google at the same age.

– Truck leasing company Ryder System plunged 13 percent, the worst decline in the S&P 500 index. The Miami-based company cut its earnings forecast for the second quarter and full year, blaming weak demand for commercial truck rentals and unusually high costs for medical benefits. The stock lost $5.31 to $35.44.

– The cruise ship operator Carnival Corp. dropped 2.7 percent after reporting a 92 percent plunge in quarterly profits, largely a result of losses on derivative fuel contracts. The company's brands include the Costa line of cruise ships, whose Concordia capsized off the Italian coast in January. Carnival's stock lost 92 cents to $33.66.

source: mb.com.ph

Wall Street rises, pushing S&P above 1,400

US stocks rose on Thursday, with the S&P 500 topping the 1,400-mark for the first time since the financial crisis on a strong run of economic data.

Though 1,400 on the S&P, which marks the highest level for the index since June 2008, does not have much technical importance, it is viewed as a bullish psychological marker.

Trading was also volatile at the start of "quadruple witching," the dates of expiration and settlement of four types of equity futures and options contracts.

The S&P 500 has risen more than 11 percent so far this year without a major pullback, and while some have called for a consolidation, others see the momentum persisting.

"We've had such a strong run that a lot of people are concerned we're up too much, but data has been so positive that I think we'll continue to grind higher," said Hank Herrmann, chief executive of Waddell & Reed Financial Inc in Overland Park, Kansas.

Herrmann, who helps oversee $90 billion in assets, forecast further gains of as much as 8 percent in the S&P until the U.S. presidential election in November.

On Thursday, U.S. Labor Department data showed new claims for unemployment benefits fell back to a four-year low last week, and producer prices, excluding food and energy, were contained.

Manufacturing data in New York and the U.S. mid-Atlantic region also improved, according to regional Federal Reserve surveys.

The Dow Jones industrial average .DJI was up 32.39 points, or 0.25 percent, at 13,226.49. The Standard & Poor's 500 Index .SPX was up 6.38 points, or 0.46 percent, at 1,400.66. The Nasdaq Composite Index .IXIC was up 12.45 points, or 0.41 percent, at 3,053.18.

The S&P 500 snapped a five-day winning streak on Wednesday as investors found little reason to extend a rally that took the benchmark index to four-year highs. But the index is up over 2 percent this week, its best since early February.

Apple Inc (AAPL.O) pulled back 1.1 percent to $582.89, ending a six-day streak of gains, though it hit a new all-time high above $600 in early trading. Some analysts have predicted the stock will move to $700 within 12 months.

Helping transport stocks but hurting energy companies was Britain's decision to cooperate with the United States in a bilateral agreement to release strategic oil stocks in an effort to prevent high fuel prices derailing economic growth in a U.S. election year, according to two British sources.

Brent crude futures fell 1 percent. The Dow transport index .DJT rose 3.2 percent, while the S&P energy index traded flat.

Semiconductors moved higher, led by Advanced Micro Devices Inc (AMD.N), which jumped 5.7 percent to $8.20 after Jefferies upgraded the stock to "buy." The Philadelphia Semiconductor Index .SOX gained 1.4 percent.

Ross Stores Inc (ROST.O) reported a higher profit for the holiday quarter as shoppers sought out popular clothing brands at discount prices, and the off-price chain forecast "respectable" sales and profit gains for this fiscal year. Shares dropped 0.5 percent to $55.26. The Morgan Stanley retail index .MVR rose 0.4 percent.

Three initial public offerings made their debuts on Thursday: cloud computing-based software company Demandware Inc (DWRE.N), analog chipmaker M/A-Com Technology Solutions Holdings (MTSI.O) and Allison Transmission Holdings (ALSN.N).

Demandware surged 53 percent to $24.59, M/A-Com advanced 10.5 percent to $21 and Allison Transmission rose 1.5 percent to $23.35. — Reuters

source: gmanetwork.com