New York, Oct 13 (AP/UNB) — Stocks rebounded Friday, clawing back some of the week's steep losses, but the turbulent trading of the last few days left no doubt that the relative calm the markets enjoyed all summer had been shattered.
Major U.S. indexes ended the week down about 4 percent, their worst weekly loss in six months. An index measuring the performance of small-company stocks had its worst week since early 2016.
Big technology and consumer-focused companies led the recovery Friday. Longtime favorites of many investors, they had plunged in the last few days.
A major factor cited by market watchers for the pullback was a sharp increase in interest rates, which can slow the economy and make bonds more attractive to investors relative to stocks.
Apple climbed 3.6 percent to $222.11 and Microsoft gained 3.5 percent to $109.57. Amazon jumped 4 percent to $1,788.41. Those are the three most valuable companies in the U.S., and they suffered startling declines the last few days: on Wednesday each took its biggest loss in more than two years. That made for a dramatic end to three months of calm on the U.S. market.
The S&P 500 index rose 38.76 points, or 1.4 percent, to 2,767.13 to end a six-day losing streak. The benchmark index tumbled 4.1 percent this week, and it's down 5.6 percent since from its latest record high, set Sept. 20. Thanks in part to the big gain for technology companies, the Nasdaq composite jumped 167.83 points, or 2.3 percent, to 7,496.89.
The Dow Jones Industrial Average rose as much as 414 points early on, then gave it all up and turned slightly lower. It rebounded and finished with a gain of 287.16 points, or 1.1 percent, at 25,339.99.
The market's recent skid started last week, when strong economic data and positive comments from Federal Reserve Chair Jerome Powell helped set off a wave of selling in the bond market as investors they bet that the U.S. economy would keep growing at a healthy pace. That pushed bond prices lower and sent yields up to seven-year highs.
That drove interest rates sharply higher, which worried stock investors who felt that a big increase could stifle economic growth. The big swings in the market Friday suggest those fears haven't gone away. The VIX, a measurement of how much volatility investors expect, hasn't been this high in six months.
"What seems to have driven this is a fear interest rates were going to rise more quickly because the Fed was being too aggressive or the economy was going to overheat," said David Kelly, chief global strategist for JPMorgan Funds. Kelly said he doesn't think either of those fears is justified, as the Fed isn't raising interest rates that rapidly and economic growth hasn't sped up recently.
Small companies didn't fare as well. The Russell 2000 index rose just 1.30 points, or 0.1 percent, to 1,546.68 to wrap up its largest loss in one week since January 2016. High-dividend stocks like utilities and real estate investment trusts also rose less than the rest of the market. They held up relatively well over the past few days. Investors view them as relatively safe, steady assets that look better when growth is uncertain and the rest of the market is in turmoil.
U.S. automakers Ford and General Motors continued to slump. GM shed 1.6 percent to $31.79, its lowest in almost two years. Ford, trading at its lowest in almost nine years, dipped 1.9 percent to $8.64. Both have plunged this year as they deal with slowing sales and the Trump administration's tariffs on steel and aluminum, which are sending their manufacturing costs higher.
The stocks have fallen further in recent days following reports Ford might cut jobs. In late September, Ford CEO Jim Hackett said the steel and aluminum duties would cost the company $1 billion through 2019.
Investors are also growing more concerned that U.S.-China trade tensions are impairing global economic growth. The International Monetary Fund cut its forecast for global economic growth this week because of trade tensions and increased interest rates.
Sam Stovall, chief investment strategist for CFRA, said he thought stocks fell too far, but there could be more turmoil ahead for the markets. While stocks had done well in spite of the rising trade tensions between China and the U.S., investors seem more worried now.
"Everybody has been pretty much dismissing the effect of the trade war on U.S. equities, and now they're beginning to think 'wait a minute, maybe there could be a problem,'" he said. "I don't think the reasons for the decline have been resolved."
Bond prices edged lower. The yield on the 10-year Treasury note rose to 3.15 percent 3.13 percent. At the beginning of the year it stood at 2.46 percent.
U.S. crude oil added 0.5 percent to $71.34 a barrel in in New York. Brent crude, the international standard, picked up 0.2 percent to $80.43 a barrel in London.
Wholesale gasoline rose 0.5 percent to $1.94 a gallon. Heating oil fell 0.5 percent to $2.32 a gallon. Natural gas lost 1.9 percent to $3.16 per 1,000 cubic feet.
Asian stocks also rebounded. Japan's Nikkei 225 index gained 0.5 percent after sinking early in the day and following a nearly 4 percent loss on Thursday. Hong Kong's Hang Seng surged 2.1 percent and the Kospi in South Korea rose 1.5 percent.
European stocks finished mostly lower. The French CAC 40 dipped 0.2 percent and so did the FTSE 100 in Britain. The DAX in Germany slipped 0.1 percent.
After a big jump Thursday, gold lost 0.5 percent to $1,222 an ounce. Silver rose 0.2 percent to $14.64 an ounce. Copper slipped 0.1 percent to $2.80 a pound.
The dollar slipped to 112.01 yen from 111.94 yen. The euro fell to $1.1563 from $1.1594.
New York, Oct 12 (AP/UNB) — U.S. stocks sank more than 2 percent Thursday, the second day of steep declines around the globe driven by concerns about rising interest rates and trade tensions that could slow economic growth.
The Dow Jones Industrial Average fell 545 points after dropping 831 points Wednesday. The two-day loss of 5.3 percent is the biggest for Dow since February. The S&P 500 is also down more than 5 percent over the two days and after falling for the past six trading days is almost 7 percent below its Sept. 20 high.
The recent turbulence in financial markets is a contrast to what investors have grown accustomed to in a bull market that has lasted more than 10 years, the longest in history. A hallmark of the past decade has been ultra-low interest rates, which the Federal Reserve used to promote growth in the aftermath of the 2008 financial crisis.
The Fed has been gradually raising interest rates over the past two years, after not having increased them since the recession. Those higher rates have been the catalyst for recent selling, stoking concerns that slower growth would impinge on corporate profits.
The selling Thursday was widespread. Energy companies sank along with oil prices and CVS lead a rout in health care stocks. Technology companies and retailers, including longtime market favorites Apple, Alphabet and Amazon, extended their recent slide.
"There isn't much of a place to hide right now in the equity market," said Willie Delwiche, an investment strategist at Baird.
Seeking safety, investors bought gold and government bonds. That pushed bond prices up and their yields down, ending a surge in yields that had touched off the market's current decline. But investors found more things to worry about.
There are ongoing concerns about the unresolved trade dispute between the U.S. and China, the world's second-biggest economy.
Strong earnings reports in the coming weeks could soothe investor nerves, but negative comments from company executives about future profits could have the opposite effect. Recently a larger-than-normal number of companies have warned that their third-quarter results could be weaker than analysts expected.
The benchmark S&P 500 index rose in morning trading, but ultimately gave up 57.31 points, or 2.1 percent, to 2,728.37, its lowest close in three months. The index has declined 6.7 percent during its current losing streak. That's its steepest downturn since a 10-percent drop in early February.
The Dow Jones Industrial Average lost 545.91 points, or 2.1 percent, to 25,052.83 after falling as much as 698. The Nasdaq composite skidded 92.99 points, or 1.3 percent, to 7,329.06. The Russell 2000 index of smaller-company stocks fell 30.03 points, or 1.9 percent, to 1,545.38.
Thursday's losses in the U.S. followed steep declines overseas. Markets in France, Britain and Germany fell after stocks declined sharply in Hong Kong and Japan.
"People are trying to get a sense of 'where should my money actually be right now?'" said JJ Kinahan, chief market strategist for TD Ameritrade.
The S&P 500's current decline is the longest since a nine-day skid shortly before the 2016 presidential election. It has climbed 27.5 percent since Donald Trump was elected and is still up 2.1 percent in 2018.
The market had been calm from late June through September as investors were satisfied with continued economic growth, strong company profits, and signs of progress in trade talks between the U.S. and several partners, even as the U.S. remained at odds with China.
But traders have grown more uneasy about the U.S.-China trade dispute, which has been escalating. Washington has imposed tariffs on tens of millions of dollars of Chinese exports and Beijing has responded with similar retaliatory taxes on imports of U.S. goods.
And there are indications that China's economy has begun to cool, prompting its government to take steps to stem the slowdown in economic growth. China's stock market is in a steep slump, with Hong Kong's Hang Seng index down more than 15 percent this year.
Delwiche, the Baird strategist, thinks the current U.S. market slump isn't over yet.
"I don't see evidence right now that this is a one-off event," he said.
On Thursday, President Trump renewed his criticism of the Federal Reserve, blaming the recent downturn in the stock market on the Fed's rate policy.
"We have interest rates going up at a clip that's much faster than certainly a lot of people, including myself, would have anticipated. I think the Fed is out of control," the president said to reporters in the Oval Office.
Trump said he had no intention of firing Jerome Powell, who he appointed as Fed chairman in February.
Bond prices rose as the recent surge in yields attracted the attention of some investors. The yield on the 10-year Treasury note fell to 3.15 percent from 3.22 percent late Wednesday. That's still sharply higher than it was about a week ago, and earlier this week the yield on the 10-year note reached its highest level since mid-2011.
The drop in yields hurt banks, and JPMorgan Chase fell 3 percent to $1078.13 while Bank of America sank 3 percent to $28.36. JPMorgan Chase and several other banks will report their third-quarter results Friday morning.
Technology and retail companies continued to stumble. Amazon dropped another 2 percent to $1,719.36 and Apple fell 0.9 percent to $214.45. Microsoft and Alphabet, Google's parent company, were little changed. Those stocks have made huge gains for years, but they're currently out of favor. Amazon and Alphabet, respectively the second- and fourth-most valuable U.S. companies, are in what's known as a "correction," a drop of more than 10 percent from a recent peak. Facebook, the sixth-largest company, has tumbled 29 percent since late July, surpassing the 20-percent threshold for a "bear market."
The Nasdaq composite has fallen 9.6 percent since it set a record high in late August and the Russell 2000 has fallen 11 percent.
U.S. crude dropped 3 percent while Brent crude, the international standard, dropped 3.4 percent. Wholesale gasoline, heating oil and natural gas also declined.
After months of declines, the price of gold jumped by the most in two years, rising 2.9 percent to $1,227.60 an ounce.
In other metals trading, silver rose 2 percent and copper added 0.8 percent.
The dollar fell to 111.94 yen from 112.59 yen, and the euro rose to $1.1594 from $1.1525.
Dhaka, Oct 11 (UNB) - International Finance Corporation (IFC), a member of the World Bank Group, has invested $20 million as a long-term loan in Omera Petroleum, a subsidiary of MJL Bangladesh Limited, to help the company double its capacity and increase the availability of liquefied petroleum gas (LPG), especially in rural areas.
Omera, whose parent MJL is majority owned by the Bangladeshi conglomerate, East Coast Group, is the second-largest player in Bangladesh’s LPG market by volume, said the IFC in a statement on Thursday.
The IFC loan is part of its project to double its capacity and make LPG available in nearly all sub-districts of the country.
This will expand access of LPG to 350,000 additional households (around 12 percent of the total market potential) over the life of the loan.
It will also help reduce greenhouse gas emissions by substituting kerosene, wood, and other hazardous cooking fuels, and allow the limited reserves of natural gas to be diverted to power generation and industries.
Declining natural gas supplies have prompted the Government of Bangladesh to promote LPG as a major source of primary energy.
The government aims to supply LPG as cooking fuel for 70 percent of households within the next three years.
It has also been promoting LPG usage in vehicles as an alternative to compressed natural gas CNG) and bulk LPG for industrial purposes.
“IFC is committed to delivering clean energy to all people in Bangladesh,” said Wendy Werner, IFC Country Manager for Bangladesh, Bhutan and Nepal.
“Omera’s expansion will enable businesses and families across the country to switch from biomass energy to clean LPG fuel for cooking and commercial activities. LPG makes positive development impact in Bangladesh’s energy mix. We laud the Government’s stance to promote privatization of LPG sector to create a resilient energy sector.”
Bangladesh is a low-income International Development Association (IDA) country.
IFC's country strategy for 2017-21 – while addressing other key development gaps – focuses on increasing access to electricity, and diversifying energy sources. This project will enable the end users to switch to a much cleaner and efficient fuel.
“Omera has made great socio-economic contribution across Bangladesh by delivering the largest volume of LPG using our state-of-the art infrastructure across urban & remote areas”, said Tanzeem Chowdhury, Head of Corporate Planning and Business Development.
He said this is the beginning of a long term partnership between IFC and East Coast Group to finance and build larger projects that will help achieve our Group objective to provide easy access of green fuels and clean energy to every district of Bangladesh.
Access to energy and diversification of fuel are two critical bottlenecks in the growth trajectory of Bangladesh. In the last five years, IFC has invested about $800 million to remove these obstacles. This is IFC’s first investment to promote LPG in Bangladesh, said the statement.
Dhaka, Oct 11 (UNB)- Local electronics giant, Walton is going to invest 10 million US dollars in television production at its own factory to manufacture best quality products for customers home and abroad.
A conference of Walton plaza managers on Thursday disclosed the matter at its corporate office in the city.
SM Mahbubul Alam, Director of Walton Group, inaugurated the daylong conference titled ‘Meet the Plaza Managers & Exchange View 2018’ where more than 300 managers from different parts of the country along with high-officials of Walton were present.
Speaking on the occasion, SM Nurul Alam Rezvi, Chairman of Walton Hi-Tech Industries Ltd. said that “Walton is not only conducting business in Bangladesh but also in the whole world. It is now an international brand. Walton is manufacturing world-class products using best raw materials at its own production plant equipped with latest technology and machineries.”
Vice Chairman SM Shamsul Alam said “Walton has been providing best products and services to customers since its inception. Walton tops the VAT payer list in Dhaka international trade fair every year. Few days ago, Walton received National Environment Award and recently honored with Export Excellence Award.”
Speaking on the occasion chief guest SM Mahbubul Alam said “All customers are equally important. Ensuring customer satisfaction by providing best quality products and services is our main goal. So, the Plaza managers need to be sincerer.”
At the ceremony, the best Plaza Managers of different zones were rewarded. The daylong function ended with a pleasant cultural program.
Dhaka, Oct 11 (UNB) - Asian Development Bank (ADB) Country Director Manmohan Parkash on Thursday said ADB’s new procurement policy is a paradigm shift towards faster and more effective implementation of ADB-assisted projects in Bangladesh.
“The policy will help reduce the overall procurement time and transaction costs, improve quality of procurement, promote advanced and cleaner technologies, encourage deeper focus on project design and planning, and infuse more flexibility and dynamism in the bidding process allowing multiple stage bidding for complex procurement,” said Parkash.
The ADB explained its new procurement policy at a ceremony at Bangabandhu International Conference Center in the city.
Economic Affairs Advisor to Prime Minister Dr Mashiur Rahman opened the event.
“The policy also promotes the greater use of country systems and introduced simpler process for cofinanced projects,” Parkash added.
Additional Secretary, ADB Wing, Economic Relations Division, Ministry of Finance Muhammad Alkama Siddiqui and Director General, Central Procurement Technical Unit, Implementation Monitoring and Evaluation Division Md. Faruque Hossain spoke at the ceremony.
Effective implementation of the new procurement policy in ADB-funded projects was discussed at the event.
About 170 senior government officials, project directors, and ADB staff participated.
The new policy, for which guidance notes were issued in 2018, emphasizes two new principles----‘quality’ and ‘value for money’ along with the existing principles of economy, efficiency, fairness, and transparency, ADB said.
Currently, ADB has 96 loans and grants for 56 projects with over $10.1 billion under sovereign portfolio in Bangladesh.
During January-September 2018, ADB approved loans and grants equivalent to $2.15 billion, and contract awards crossed $1.1 billion and disbursement $700 million.
ADB’s portfolio performance in Bangladesh is expected to hit the highest record in 2018 while it has grown by 300 percent since 2008.
ADB focuses its cooperation in Bangladesh in six sectors—energy; transport; water and urban/municipal infrastructure and services; education; finance; and agriculture, natural resources, and rural development.
ADB’s cumulative lending to Bangladesh stands at around $22 billion for 284 loans, $263 million for 435 technical assistance projects, and $922 million for 41 grants.