Page 25 - Aruba Today
P. 25
BUSINESS A25
Friday 12 February 2016
US stocks slide further on global economic worries
ALEX VEIGA Trader Justin Flinn works on the floor of the New York Stock Exchange, Monday, Feb. 8, 2016. U.S. it is already struggling with
AP Business Writer stocks moved broadly lower in early trading Monday, putting the market on track for its second a litany of issues, including
Jitters over the global sizeable loss in a row. Technology, financial and energy stocks were among the biggest decliners. China’s slowdown, low in-
economy and a steep drop flation and plunging ener-
in crude oil knocked U.S. (AP Photo/Richard Drew) gy markets.
stocks lower for the fourth Yellen, in her second day
day in a row Thursday. tumbled to $26.21, its low- lier in the day. The Dow cent, to 1,829.08. The Nas- of testimony before U.S.
The drop in the U.S. fol- est level since May 2003. Jones industrial average daq composite fell 16.76 lawmakers Thursday, ac-
lowed large losses all Investors fled to the tra- dropped 254.56 points, or points, or 0.4 percent, to knowledged that global
around the world, and left ditional havens of bonds 1.6 percent, to 15,660.18. 4,266.84. economic pressures pose
all three major U.S. indexes and precious metals. Gold The average had been Investors have become in- risks to the U.S. economy,
down at least 10 percent jumped 4.5 percent. down as much as 411 creasingly worried that the but said it’s too early to tell
since the beginning of the While stocks ended lower, points. mounting market turmoil whether those risks are se-
year. they recovered somewhat The Standard & Poor’s 500 could put a brake on the vere enough to alter the
The latest slump reflected from far steeper losses ear- lost 22.78 points, or 1.2 per- global economy at a time central bank’s interest-rate
heightened concerns that policies.
global economic growth That failed to reassure in-
is slowing, even as Federal vestors hoping the Fed
Reserve Chair Janet Yellen would signal that rate
reiterated her confidence hikes are off the table for
in the U.S. economy in tes- this year, said Katie Nixon,
timony to congress Thurs- chief investment officer at
day. Northern Trust Wealth Man-
“A lot of people are having agement.
trouble assessing the true “The market is disappoint-
value of stocks,” said J.J. ed in that and looking for
Kinahan, TD Ameritrade’s more direct comment on
chief strategist. “What it perhaps pushing out rate
says to me is we’re going increases,” Nixon said.
to continue with volatility.” “She had the opportunity
Financial companies were to do that, so that’s obvi-
among the biggest de- ously feeding into market
cliners amid growing anxi- anxiety.”
ety that interest rates in All 10 sectors in the S&P 500
the U.S. and elsewhere index closed lower. Finan-
would remain low and sap cial stocks fell the most,
bank profits. The price of oil down 3 percent.q
Questions grow over banks as profit warnings pile up
GREG KELLER Among the top concerns weakness and falling finan- make money by lending, bank shares.
Associated Press is that the global econo- cial markets could depress so as rates drop, so do The situation is worsened in
PARIS (AP) — Questions are my will weaken more than the U.S. economy’s growth earnings. Investors made some regions, particularly
growing over the financial expected, souring some and slow the pace of Fed big bets in the second half the eurozone and Japan,
health of banks, particu- of the loans that banks interest rate hikes. of last year that interest where the central banks
larly in Europe and the U.S., have issued to companies That’s a particular concern rates would rise in the U.S., charge commercial banks
as they face a toxic mix of around the world — partic- as the U.S. economy has so to see that bet fail has to deposit money with
low economic growth, bad ularly in distressed sectors been one of the few bright forced investors to dump them.q
loans and squeezed earn- like the energy industry. U.S. spots in the global econo-
ings. banks have tens of billions my,
France’s Societe Generale of exposure to loans made which is seeing a slowdown
became Thursday the lat- to energy companies, who in China and stagnation in
est bank to issue a con- have found themselves Japan and Europe.
fidence-shattering profit unable to pay back their The slowing of interest rate
warning, which helped trig- debts due to low energy increases in the U.S. is also
ger a new sell-off in finan- prices. bad news for the big banks,
cial stocks. Mike van Dulken, head of which have been waiting
The bank saw its share price research at Accendo Mar- anxiously for interest rates
stumble 12 percent and kets, says the latest weak- to rise.
major rivals like Deutsche ness in bank stocks stems Since the financial crisis,
Bank and UniCredit saw from U.S. Federal Reserve the big banks have largely
losses of nearly 10 percent. Chair Janet Yellen “warning grown profits by cutting
European banks are not on current financial market costs. Higher interest rates
the only ones to suffer. turbulence and suggest- would mean banks could
Japanese bank Mitsubishi ing further rate hikes could charge more for their loans.
Financial fell 7 percent on be delayed, which added The fact that many central
Thursday. In the U.S., Mor- to already raised anxiety banks keep cutting interest
gan Stanley, Citigroup and about the health of the rates, pushing down mar-
Bank of America are down global economy.” ket lending rates, is further
more than 30 percent so On Wednesday, Yellen hurting banks by squeezing
far this year. cautioned that global their profits. Banks mainly
