Saturday 23 June 2018

Wall Street ends storm-hit week with selloff

New York, November 3, 2012

Stocks ended an unusual trading week shortened by superstorm Sandy's devastating sweep through the US Northeast with a selloff on Friday, as major indexes erased early gains sparked by a stronger-than-expected payrolls report.

Energy stocks were a drag on the market after Chevron Corp, the second-largest US oil company, posted a profit that missed expectations. The stock fell 2.9 per cent to $108.26 and was one of the biggest drags on the Dow industrials.

The dollar's strength also hurt energy and materials shares. Eventually, all 10 S&P 500 sectors succumbed to selling pressure to end lower.

For the week, the Dow shed 0.1 per cent, but the S&P 500 gained 0.2 per cent. The Nasdaq ended the week down 0.2 per cent.

The trading week was shortened by a historic two-day market closure on Monday and Tuesday, spurred by superstorm Sandy's devastating sweep through the US Northeast.

"We started off on strength, with nonfarm payrolls coming in above expectations. Then we drifted lower during the day. It's hard to determine what direction we are in - with the two days off, it's really been a strange week," said Fred Dickson, chief market strategist at DA Davidson & Co, in Lake Oswego, Oregon.

From New York City's Staten Island to the popular beach towns of the Jersey Shore, rescuers and officials continued on Friday to face widespread destruction wrought by Sandy, as well as a rising death toll and frustration over delayed relief and fuel shortages.

Government data showed employers added 171,000 people to their payrolls last month, topping expectations. The jobless rate ticked up to 7.9 per cent as more workers restarted job searches, a positive signal for the economy.

The jobs report is the last one before the U.S. presidential election on Tuesday, and it could improve President Barack Obama's odds at the ballot box, though polls continue to indicate a close race between Obama and Republican candidate Mitt Romney.

Chevron also was the second-largest weight on the S&P 500. The S&P energy index, down 1.7 per cent, was one of the worst performers among the 10 major S&P 500 sector indexes. Strength in the dollar was also cited for a decline in crude prices, which hurt energy shares as well.

The S&P materials index fell 2 per cent, pulled lower by a slide of 8.4 per cent in Newmont Mining Corp to $48.74 after its profits missed expectations.

According to Thomson Reuters data through Friday, of the 378 companies in the S&P 500 that have reported earnings so far, 61.9 per cent have topped expectations, in line with the 62 per cent quarterly average since 1994.

The revenue picture is much bleaker, with only 38.2 per cent of companies having posted revenue above expectations, well below the 62 per cent quarterly average since 2002 and the 55 per cent average over the past four quarters.

"Generally, we've seen the market trend lower, primarily related to disappointing revenue reports coming out of the third-quarter earnings stream," Dickson said.

The Dow Jones industrial average dropped 139.46 points, or 1.05 per cent, to 13,093.16. The Standard & Poor's 500 Index lost 13.39 points, or 0.94 per cent, to 1,414.20. The Nasdaq Composite Index declined 37.93 points, or 1.26 per cent, to close at 2,982.13.

The S&P 500 index is down 3.5 per cent from a recent peak on September 14, and is below its 50-day moving average, amid investor caution ahead of the election and tough government budget negotiations at the end of the year.

Starbucks Corp jumped 9.1 per cent to $50.84 after raising its profit forecast for the fiscal year as sales in the United States, its top market, beat expectations, providing the company optimism that has eluded much of the U.S. restaurant industry in recent months.

Restoration Hardware shares soared 29.6 per cent to $31.10 in their market debut after the upscale furniture retailer's initial public offering was priced at the high end of the expected range. The shares hit an intraday high at $33.15 - up 38.1 per cent from the IPO price of $24.

Verizon said it expected fourth-quarter results to be hurt significantly due to superstorm Sandy, but could not estimate the effect at this time. The stock slid 1.4 per cent to$44.52.

Volume was modest, with about 6.35 billion shares traded on the New York Stock Exchange and Nasdaq, slightly below the daily average of 6.5 billion for the year so far.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of 7 to 3, while on the Nasdaq, about three stocks fell for every one that rose.-Reuters

Tags: Wall Street | Nasdaq | US stocks |


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