USA stocks have risen about 1 per cent in early trading morning, helped by gains in Apple and as oil prices eased off 12-year lows, providing some respite after stock indexes made their worst-ever start to a year.
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In corporate news, Aluminum company Alcoa unofficially kicked off the fourth-quarter earnings season of 2015 after Monday’s closing bell, by reporting earnings that beat estimates but revenue shy of forecast. It also deepens the pain for many investors after a flat year of returns for the stock market last year.
Already in 2016, the yuan has lost 1.2 percent of its value against the dollar.
There was no clear catalyst for the plunge, which saw the Dow Jones Industrial Average of blue chips sink 2.2 per cent and the Nasdaq Composite lose 3.4 per cent.
The rocky start to the year reflects mounting worries on Wall Street about a slowdown in the global economy, plunging oil prices and the implications for USA companies.
Benchmark U.S. crude edged up 4 cents to close at $30.48 a barrel in NY. While the factors that have driven prices almost 18 percent lower this year are a concern, and are hurting exporters and energy company shares, lower oil and gas costs are a boon for many resource-scarce Asian economies. Brent crude, a benchmark for global oils, fell 69 cents, or 2.2 percent, to $30.86 a barrel in London. Consol Energy shed 30 cents, or 4.3%, to 6.70. Anthem rose $5.74, or 4.5 percent, to $134.10, while Aetna added $2.38, or 2.3 percent, to $107.45. Ford fell 65 cents, or 5.1 percent, to $12.20.
CURRENCIES: Trading in the foreign exchange markets was subdued with the euro down 0.2 percent at $1.0813 and the dollar 0.2 percent higher at 118.11 yen. The Russell 2000 index capped a 22 percent slide from its June record. Supervalu fell 93 cents, or 15.5 percent, to $5.08.
DRIVING DIVIDEND: General Motors rose 1 percent after the automaker raised its dividend and added to its stock repurchase program. European stocks and oil futures traded higher, while gold futures dropped.
Metlife (MET.N) was up 4.6 percent at $43.94 after the biggest US life insurer said it plans to separate a large part of its retail business. The stock lost $1.62 to $27.76.
A broad downturn in USA stocks on another volatile day for crude oil prices knocked the Standard & Poor’s 500 index down 10 percent from its November peak.
Wall Street was higher on Wednesday, in tandem with a recovery in crude oil prices as positive Chinese trade data allayed fears about the health of the world’s second-biggest economy.
EYES ON CHINA: China’s exports rose 2.3 percent in December from a year earlier in yuan terms, reversing a 3.7 percent drop in November.
“I think that once we get some stabilization in oil markets and in Chinese growth data-both expected this year-we’ll see increases in both consumer demand and production”.
Not surprisingly, this week’s leading sectors are of the more defensive flavor, led by the Dow Jones U.S. Utilities index down 0.90 percent over the past five trading days and the Dow Jones U.S. Consumer Services index lower by 2.11 percent over the same period. In Asia, China’s Shanghai composite closed 0.2 percent higher, recovering some of its losses from the day before. South Korea’s Kospi and Australia’s S&P/ASX 200 added 1.3 percent. The three major USA stock indexes are all down for the year, with the Dow and S&P 500 index off about 5%, while the Nasdaq is down 6%.
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ASIA’S DAY: Japan’s Nikkei 225 stock index jumped 2.9 percent to 17,715.63 and Hong Kong’s Hang Seng was up 1.1 percent to 19,934.88.
