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BUSINESSThursday 7 January 2016
Stocks hit 2-month lows as oil dives, China worries flare Starboard seeks
change in Yahoo
MARLEY JAY Southwestern Energy fell also fell on Tuesday. 2016. J.J. Kinahan, chief control, strategy
AP Markets Writer 96 cents, or 12.6 percent, Scott Wren, senior global markets strategist for TD
NEW YORK (AP) — U.S. to $6.69 and Marathon Oil equity strategist for the Ameritrade, said that’s NEW YORK (AP) — A big Ya-
stocks tumbled to two- declined $1.48, or 11.6 per- Wells Fargo Investment In- making bonds attractive. hoo investor is asking for a
month lows Wednesday as cent, to $11.28. stitute, said the market was “Bonds have been up a lot leadership change at the
fears about China’s econ- France’s CAC 40 shed 1.3 overreacting to the latest this year even though the beleaguered company
omy slowing down led to percent and Germany’s signs of weakness in China. interest rates are nothing to and pushing for the spinoff
more widespread selling. DAX dropped 0.9 percent. “Stocks are not trading on be excited about,” he said. of its core Internet business.
The price of oil plunged to Britain’s FTSE 100 fell 1 per- fundamentals,” he said. “They want the security of “Despite over three years
its lowest level since 2008 of effort and billions spent
on the prospect that global Floor official Nicholas Brigandi, left, and specialist Michael Pistillo work at a post on the floor of on acquisitions, the man-
demand could fall further. the New York Stock Exchange, Wednesday, Jan. 6, 2016. U.S. stocks tumbled to two-month lows agement team that was
For the second time in three Wednesday as fears about China’s economy slowing down led to more widespread selling. hired to turn around the
days, markets slumped on Core Business has failed to
concerns about that the (AP Photo/Richard Drew) produce acceptable re-
second-largest economy sults, in turn, causing mas-
in the world is stumbling. A cent. Japan’s Nikkei 225 “They’re trading on fear knowing that their money is sive declines in profitability
monthly survey of China’s index lost 1 percent and that Chinese growth is go- safe.” and cash flow,” Starboard
service industries slipped South Korea’s Kospi fell ing to collapse and that Other energy prices also Value LP wrote in a let-
to a 17-month low. That 0.3 percent. Hong Kong’s these lower oil prices are slipped. The price of whole- ter released Wednesday.
helped knock the price of Hang Seng shed 1 percent. going to lead to a growing sale gasoline sank 9.5 cents, “It appears that investors
oil lower since China is a The Shanghai Composite number of defaults in the or 7.6 percent, to $1.162 a have lost all confidence
major consumer of energy. Index in mainland China high-yield bond market.” gallon after the U.S. gov- in management and the
Global markets were also rebounded 2.3 percent as U.S. government bond ernment said inventories Board.”
rattled after North Korea the Chinese government prices rose Wednesday as of gas climbed by 10.6 mil- If changes are not forth-
said it had conducted said it will keep some mar- the turbulent stock market lion barrels last week. Citi coming in leadership,
its first successful test of ket-stabilizing measures in made bonds more ap- Investment Research ana- Starboard said, an elec-
a hydrogen bomb. Ex- place.Stocks also plunged pealing. The yield on the lyst Edward Morse said that tion may be needed to
perts in South Korea and Monday on signs of weak- 10-year Treasury note fell to was the biggest weekly in- replace some members of
the U.S. doubted that the ness in China’s manufac- 2.17 percent from 2.24 per- crease since 1993. the board.
country had made that turing sector. The Shanghai cent. Heating oil sank 4.5 cents, Starboard did not include
breakthrough, but the an- Composite skidded almost The markets have endured or 4 percent, to $1.081 a any specific names in its
nouncement still caused 7 percent that day and a rough few days to start gallon. q letter. Mayer became CEO
alarm. of Yahoo Inc. in 2012 and
The Dow Jones industrial Webb became chairman
average dropped 252.15 in 2013.
points, or 1.5 percent, to Starboard did not immedi-
16,906.51. The Standard & ately respond to an early
Poor’s 500 index lost 26.45 request from The Associ-
points, or 1.3 percent, to ated Press for comment.
1,990.26, for its fourth loss With shares down 35 per-
in five days. The Nasdaq cent over the past year,
composite gave up 55.67 Yahoo is facing mounting
points, or 1.1 percent, to pressure from unhappy
4,835.76. shareholders.
U.S. benchmark crude sank Last month New York
$2, or 5.6 percent, to close hedge fund SpringOwl As-
at $33.97 a barrel in New set Management and Los
York, its lowest price since Angeles investment firm
December 2008. Brent Canyon Capital Advisors
crude, a benchmark for were vocal about the steps
international oils, fell $2.19, they believe Yahoo should
or 6 percent, to close at take. SpringOwl wants Ya-
$34.23 a barrel in London. hoo to lay off 9,000 of its
10,700 workers and elimi-
America’s trade deficit narrowed in November nate free food for employ-
ees to help save $2 billion
MARTIN CRUTSINGER January 2012. Imports were rope and China. economists are forecast- annually. Canyon Capital
AP Economics Writer also down, shrinking 1.7 With just one month left in ing higher deficits going recommended Yahoo sell
WASHINGTON (AP) — The percent to $224.6 billion. 2015, the deficit totaled forward and that trade its Internet business.
U.S. trade deficit dropped The import declines this $488 billion for the year, 5 will subtract from growth in Starboard had also threat-
to the lowest level in nine year reflect the big drop in percent higher than the 2016. ened an attempt to over-
months in November as global oil prices. same period in 2014. A wid- The deficit with China to- throw Yahoo’s board if the
exports fell to a nearly four- American manufacturers er trade deficit is a drag on taled $31.3 billion in No- company continued with
year low. have been hurt by a strong economic growth because vember, down 5.2 percent plans to break off its $31
The November deficit fell 5 dollar, which makes their it means fewer overseas from October. Through the billion stake in China’s Al-
percent to $42.4 billion, the products more expensive sales by American produc- first 11 months of 2015, the ibaba Group. Yahoo even-
Commerce Department on overseas markets. They ers and larger imports of deficit with China totaled tually scrapped that plan
reported Wednesday. are also contending with foreign goods. $337.8 billion, putting the and instead announced
Exports contracted 1.6 per- economic weakness in The smaller November defi- country on track to record the spinoff of its Internet
cent to $182.2 billion, the some of their biggest ex- cit should give a boost to another annual record operations.q
smallest monthly total since port markets including Eu- fourth quarter growth. But trade deficit with China.q
