Page 24 - ARUBA TODAY

Thursday 1 december 2016 BUSINESS
A24

Stocks end mixed despite gains in banks, oil OPEC agrees to cut output

MARLEY JAY and the 10-year note’s do with that,” said Tom di in bid to push up oil prices
KEN SWEET yield rose to 2.38 percent Galoma, head of Treasury
Associated Press from 2.29 percent on Tues- trading at Seaport Global GEORGE JAHN claim once again to play-
NEW YORK (AP) — Stocks day, a major move for that Holdings. KIYOKO METZLER ing a part in influencing
moved mostly lower market. That yield is now Di Galoma said he sees Associated Press world prices.
Wednesday as gains in trading at its highest level the 10-year note’s yield hit- VIENNA (AP) — Breaking And its tentative alliance
blue-chip energy compa- since July 2015. ting 3 percent by year end, with years of inaction, with Russia and other non-
OPEC agreed Wednes- OPEC nations may give it
day to cut its oil output — and them — additional
for the first time since clout in future competi-
2008. The move effec- tion for market share with
tively scraps its strategy U.S. producers, which are
of squeezing U.S. compe- sure to return in increasing
tition through high sup- numbers if crude prices
ply that had backfired move upward.
by lowering prices and Wednesday’s decision
draining the cartel’s own was a departure from
economies. years of infighting among
The reduction of 1.2 mil- members refusing to give
lion barrels a day is sig- up their market share and
nificant, leaving OPEC’s a resulting series of incon-
daily output at 32.5 mil- clusive meetings.
lion barrels. And OPEC In another reflection of
President Mohammed Bin new-found discipline with-
Saleh Al-Sada said non- in the cartel, Al-Sada said
OPEC nations are expect- Indonesia’s membership
ed to pare an additional had been suspended af-
600,000 barrels a day off ter it refused to accept its
their production. share of proposed output
The combined cut will re- cuts, reducing the num-
Trader Christopher Morie works on the floor of the New York Stock Exchange. Stocks moved most- sult, at least in the short ber of OPEC countries to
ly lower Wednesday as gains in blue-chip energy companies and banks were not enough to
make up for losses in the broader market. term, in somewhat more 13. Part of the focus fol-
(AP Photo/Richard Drew) pricey oil — and, by ex- lowing Wednesday’s de-
tension, car fuel, heating cision is how well it holds.
nies and banks were not The election of Donald a level not seen in nearly and electricity. The inter- OPEC gave up assigning
enough to make up for Trump as the country’s next three years. national benchmark for quotas in part because
losses in the broader mar- president has sent investors In energy, OPEC members crude jumped 8.3 per- members have ignored
ket. fleeing out of safe-play as- finalized a deal that will cut cent, or $3.86, to $50.24 them in their quest for
The bond market took sets like bonds, gold and their oil output by 1.2 mil- on Wednesday. petrodollars. But officials
heavy losses, with the 10- dividend-paying stocks this lion barrels a day starting in In the longer term, howev- were displaying new con-
year U.S. Treasury note ris- month and into riskier in- January. er, analysts say it’s highly fidence. In comments
ing to its highest level in a vestments like small com- Preliminary terms of the unlikely that oil will return addressed to nay-sayers
year and a half. panies, which would bene- deal were announced in to the highs of around about his organization’s
The higher yields sent bond fit the most from a growing September. $100 a barrel last seen two relevance, Al-Sada said
substitutes like utilities, tele- domestic economy. It’s the first time in eight years ago. That’s partly its decision “means the
communications and real The Russell 2000 index, years that the cartel has due to the fact that Pres- weight of OPEC and the
estate stocks sharply lower. which is made up of mostly agreed to cut production. ident-elect Donald Trump resiliency of OPEC is still
Oil stocks climbed after small to mid-sized compa- Russia, another major oil- has promised to free up there and it will continue
OPEC nations, which col- nies, soared 11 percent in producing country that more oil drilling in the U.S., to be there.”
lectively produce more November. is not part of OPEC, also which would increase “Today’s unity is a very ex-
than one-third of the That’s the biggest one- agreed to cut its output. global supply. Demand is plicit sign about the posi-
world’s oil, agreed to trim month gain for that index in The price of U.S. crude also not recovering as the tion of OPEC,” he added.
production for the first time five years. surged $4.21, or 9.3 per- world economy sags. Meetings to turn the
in eight years. Investors believe Trump’s cent, to close at $49.44 a Playing tribute to “a his- planned non-OPEC cuts
The Standard & Poor’s 500 promises to cut taxes, in- barrel in New York. That’s toric moment,” Al-Sada into reality are planned
index lost 5.85 points, or 0.3 vest heavily in infrastruc- the biggest one-day gain said Wednesday’s move next month in Doha. From
percent, to 2,198.81 and ture, and cut back regu- since February. “will definitely balance Moscow, Russian Energy
the Nasdaq composite lation will help grow the Brent crude, the interna- the market and help (in) Minister Alexander Novak
dropped 56.24 points, or economy and might even tional benchmark, gained reducing the stock over- confirmed his country’s
1.1 points, to 5,323.68. cause inflation, which has $4.09, or 8.8 percent, to hang.” Al-Sada said the readiness to pare 300,000
The 30-member Dow Jones been almost non-existent $50.47 a barrel in London. OPEC cutback is to take barrels from its output,
industrial average closed since the financial crisis. U.S. Crude dropped almost 4 effect Jan. 1, with con- adding that it would hap-
up 1.98 points, or 0.01 per- government bonds quickly percent Tuesday as inves- sultations planned on the pen gradually “within a
cent, to 19,123.58. become less appealing to tors felt a deal was becom- exact timing of the non- short period of time based
The gain was attributable investors in a healthy, grow- ing less likely. OPEC reductions. Russia on technical capacity.”
to big increases in a hand- ing economy and in an in- Other energy commodities alone is committed to Al-Sada said the OPEC
ful of Dow components, flationary environment. also jumped sharply. Heat- taking 300,000 barrels a cutbacks are in effect for
mainly Goldman Sachs, “We have elected a pro- ing oil rose 11 cents to $1.57 day off the market. six months with the option
Chevron and DuPont. growth president who is a gallon, wholesale gaso- With the production cut, of renewal after a review
The bond and energy mar- going to move very quick- line rose 11 cents to $1.49 a OPEC will not only benefit by a five-nation com-
kets saw the most drama ly to make some drastic gallon and natural gas rose from gaining more dollars mittee set up to monitor
on Wednesday. Bond pric- changes, and investors are 3 cents to $3.35 per 1,000 per barrel. It can also lay compliance.q
es fell sharply yet again trying to figure out what to cubic feet.q