Stocks end lower to cap 1st weekly loss in a month

Kuwait Times - - BUSI­NESS -

Stocks ended slightly lower on Wall Street on Fri­day, giv­ing the mar­ket its first weekly de­cline in a month. The mar­ket edged up in early trad­ing af­ter a much an­tic­i­pated re­port on hir­ing last month showed de­cent gains. It quickly turned lower and re­mained down for the rest of the day. Sup­pli­ers of ba­sic ma­te­ri­als and in­dus­trial com­pa­nies lost the most.

The govern­ment re­ported that em­ploy­ers hired last month at a slower pace than fore­cast, but not slow enough to sig­nal the econ­omy is in trou­ble and cause the Fed­eral Re­serve to hold off on rais­ing in­ter­est rates later this year. Bonds were lit­tle changed on the news. The yield on 10-year Trea­sury notes slipped to 1.72 per­cent from 1.74 per­cent.

Real es­tate and phone com­pa­nies con­tin­ued to de­cline. Once fa­vored by in­vestors for their rel­a­tive sta­bil­ity and steady div­i­dends, they have be­come less at­trac­tive at the prospect of higher in­ter­est rates. Real es­tate com­pa­nies lost 5 per­cent dur­ing the week, and phone com­pa­nies slumped 3.8 per­cent.

“Ev­ery­thing that ev­ery­one had been buy­ing for safety has gone down this week, and it’s gone down big,” said John Fox, chief in­vest­ment of­fi­cer of Fen­i­more As­set Man­age­ment. “You have an un­wind­ing of the low-rate trade.” The Dow Jones in­dus­trial av­er­age fell 28.01 points, or 0.2 per­cent, to 18,240.49. The Stan­dard & Poor’s 500 in­dex lost 7.03 points, or 0.3 per­cent, to 2,153.74. The Nas­daq com­pos­ite de­clined 14.45 points, or 0.3 per­cent, to 5,292.40.

Dragged down

In­dus­trial com­pa­nies were dragged down in part by Honey­well In­ter­na­tional, which low­ered its earn­ings fore­cast. The com­pany put out a press re­lease cit­ing lower ship­ments to avi­a­tion equip­ment mak­ers and de­lays in its mil­i­tary and space busi­nesses, among other things. Honey­well closed down $8.67, or 7.5 per­cent, to $106.94.

The jobs re­port showed that US em­ploy­ers added 156,000 jobs last month, a de­cent gain but slightly be­low mar­ket ex­pec­ta­tions. Jobs growth has av­er­aged 178,000 a month so far this year, down from last year’s pace of 229,000. Most in­vestors ex­pect the Fed to raise rates in De­cem­ber. It has held them near zero since 2008, a fac­tor that many mar­ket watch­ers cite as a key driver of the seven-year bull run in stocks. Low in­ter­est rates make stocks ap­pear rel­a­tively ap­peal­ing com­pared to lowyield­ing bonds or CDs. They also make it eas­ier for com­pa­nies to bor­row money to buy back their own stock.

“The world’s largest econ­omy looks to be sail­ing full steam ahead to a rate hike be­fore the end of the year,” said said Paul Si­rani, chief mar­ket an­a­lyst at Xtrade.

Among stocks mak­ing big moves, Tyson Foods plunged $6.63, or 9 per­cent, to $67.75 af­ter an an­a­lyst pre­dicted a big drop in Tyson be­cause of a law­suit that ac­cuses it and other com­pa­nies of ma­nip­u­lat­ing poul­try prices.

Gap jumped $3.47, or 15 per­cent, to $26.25 af­ter re­port­ing Septem­ber sales re­sults that showed growth at its Old Navy chain. Other re­tail­ers rose, too. Ruby Tues­day fell 17 cents, or 7 per­cent, to $2.34 af­ter the restau­rant chain re­ported a loss in its fis­cal first quar­ter. In cur­rency mar­kets, the Bri­tish pound fell as much as 6 per­cent in what’s be­ing dubbed a “flash crash,” to its low­est level in more than three decades. It even­tu­ally re­bounded to $1.2435, down from $1.2605 on Thurs­day.

Bri­tain’s FTSE 100 rose 0.6 per­cent in the wake of the pound’s lat­est de­cline. A lower cur­rency po­ten­tially makes Bri­tish ex­ports more com­pet­i­tive as well as boost­ing the value of for­eign earn­ings when brought back to the UK. Ger­many’s DAX was down 0.7 per­cent while the CAC-40 in France fell 0.7 per­cent. US bench­mark crude oil fell 63 cents to close at $49.81 a bar­rel in New York. Brent crude, the in­ter­na­tional stan­dard, fell 58 cents to close at $51.93 a bar­rel in Lon­don. Whole­sale gaso­line fell 2 cents to $1.48 a gal­lon, heat­ing oil fell 2 cents to $1.58 a gal­lon and nat­u­ral gas jumped 14 cents to $3.19 per 1,000 cu­bic feet. The price of gold fell $1.10 to $1,251.90 an ounce, sil­ver rose 4 cents to $17.38 an ounce and cop­per rose less than 1 cent to $2.16 a pound. The euro rose to $1.1180 while the dol­lar fell to 103.07 yen. — AP

NEW YORK: Spe­cial­ist Ja­son Hardzewicz, left, works at his post on the floor of the New York Stock Ex­change. — AP

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