Saturday, January 31, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

US stocks buck turmoil weighing on global markets

By
From page B6 | August 09, 2014 |

NEW YORK — A burst of buying Friday in U.S. stocks defied slumps in other markets and offered hope for investors shaken by geopolitical turmoil. Major U.S. stock indexes closed up around 1 percent, buoyed by signs that tensions in Ukraine might be easing.

The rally on Wall Street contrasted with price declines in European and Asian stock markets. Fear has been creeping into stock and bond markets around the world in recent weeks against a backdrop of escalating global conflicts.

News Friday of U.S. fighter jets dropping bombs in Iraq and the end of a three-day cease-fire in Gaza weighed further on European markets. Asian markets also had a bad week, including a 5 percent drop in Japan’s benchmark stock index.

As anxieties have risen in recent days, money has been flowing from around the world into U.S. Treasurys, the perennial safe haven for spooked investors.

U.S. stock markets bucked the trend Friday as investors snapped up shares that had been beaten down in recent days. The buying surged late in the day on reports that Russia had ended military exercises near Ukraine. The Dow Jones industrial average surged 1.1 percent, its biggest gain since March. The index remains 3.4 percent below its record high set July 16.

Jim Paulsen, chief investment strategist at Wells Capital Management, said he wasn’t surprised by the Wall Street rally.

“The U.S. economy will grow at 3 percent or 4 percent for the rest of the year,” Paulsen said. “Are geopolitical risks really going to have an economic impact?”

It’s a question that’s been unsettling investors.

In June and most of July, prices in major stock indexes in the United States rose even in the face of the widening conflicts around the world. Some experts warned that markets had grown dangerously complacent.

But then the West imposed increasingly crushing sanctions on Russia for supporting rebels in Ukraine. Israel’s bloody war in Gaza dragged on. And Sunni extremists made advances in northern Iraq.

Prices then began a sustained decline, even in resilient U.S. markets. U.S. stocks in July posted their first monthly loss since January.

The fear has driven up various government bond prices, too, and sent yields down. The yield on German government notes maturing in 10 years, for instance, hit an all-time low Friday. The yield on U.S. notes of the same maturity has reached its lowest level in about a year.

Another sign of worry, the VIX, a gauge of expectation of future U.S. stock volatility, has climbed nearly 50 percent since early July.

One fear is that Europe could fall back into another recession after having emerged from one last year. The economies of the 18 countries that share the euro currency are barely growing, and many of them depend on Russia for natural gas imports. Germany imports nearly all its natural gas from Russia.

This week, the head of the European Central Bank, Mario Draghi, warned that the crisis in Ukraine could hurt the fragile recovery in the region.

The troubles in Iraq also threaten oil supplies. A report from Citigroup to clients early Friday noted that Iraq is the fastest-growing supplier among OPEC members.

Benchmark U.S. crude oil rose 31 cents to close at $97.65 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 42 cents to close at $105.02 on the ICE Futures exchange in London.

The Citi report also noted, though, that there was reason to keep buying stocks, not the least of which is strong corporate earnings.

An announcement from Gap on Friday underscored that trend. It reported that sales increased 3 percent in the second quarter as growth at Old Navy offset lower sales of the company’s namesake brand. Its stock jumped $2.37, or 6 percent, to $42.57.

With nearly all second-quarter results for S&P 500 companies out, analysts are calling for earnings in that index to jump 10 percent from a year earlier. At the beginning of July, they expected a gain of less than 7 percent, according to S&P Capital IQ, a data provider.

On Friday, the Dow ended up 185.66 points, or 1.1 percent, to 16,553.93. The Standard & Poor’s 500 index rose 22.02 points, or 1.2 percent, to 1,931.59. The Nasdaq composite rose 35.93 points, or 0.83 percent, to 4,370.90.

In economic news, the U.S. Labor Department reported that workers were more productive in the April-June quarter and that labor costs rose slightly, a sharp turnaround from grim first-quarter figures. Productivity increased 2.5 percent at a seasonally adjusted annual rate, after plummeting 4.5 percent in the first quarter.

In Europe, Germany’s DAX fell 0.3 percent while the FTSE 100 index of British shares dropped 0.5 percent. Both indexes are down about 2 percent for the week, capping three weeks of losses.

France’s CAC-40 was flat, but ended the week down 1.3 percent. That was its third straight weekly loss.

In corporate news, shares of Lululemon Athletica rose $1.08, or 3 percent, to $40.11. The company’s founder and former chairman, Dennis “Chip” Wilson, has agreed to sell half his stake as part of a truce to avert a potentially battle for control of the retailer of yoga apparel and other exercise gear.

In metals trading, gold fell $1.50 to $1,311 an ounce and silver fell five cents to $19.94 an ounce. Copper was flat at $3.17 a pound.

The yield on the 10-year Treasury note edged up to 2.42 percent from 2.41 percent late Thursday.

 

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

 
Solano County confirms 1st local case of measles

By Staff and wire reports | From Page: A1, 2 Comments

 
SPCA begins caring for more than 100 rescued dogs

By Kevin W. Green | From Page: A1, 4 Comments | Gallery

 
Top workers, top students – and succulent crab

By Susan Hiland | From Page: A2

 
Partial Fairfield freeway road closure starts Monday

By Ryan McCarthy | From Page: A3

DUI patrols set for Super Bowl Sunday

By Ryan McCarthy | From Page: A3

 
Armijo students savor catered Fuddruckers lunch

By Susan Hiland And Susan Winlow | From Page: A3 | Gallery

Fairfield police log: Jan. 29, 2015

By Susan Hiland | From Page: A9

 
Suisun City police log: Jan. 29, 2015

By Susan Hiland | From Page: A9

 
.

US / World

Man charged in California family’s deaths will be own lawyer

By The Associated Press | From Page: A3

 
Stanford University to get $50 million to produce vaccines

By The Associated Press | From Page: A3

PG&E releases thousands of emails with state regulators

By The Associated Press | From Page: A4

 
Yosemite park fee hikes coming in March

By The Associated Press | From Page: A4

San Francisco coroner says human remains are from 1 man

By The Associated Press | From Page: A4

 
French fracture laid bare as 8-year-old praises terrorists

By The Associated Press | From Page: A5

 
US mulls Middle East-North Africa category for 2020 Census

By The Associated Press | From Page: A5

Balloon crew makes history crossing Pacific Ocean

By The Associated Press | From Page: A5

 
Murder trial begins 35 years after 6-year-old vanished in NY

By The Associated Press | From Page: A5

Judge: Funeral home wrongly sold Lee Harvey Oswald’s casket

By The Associated Press | From Page: A5

 
Jordan awaits proof hostage is alive after swap deadline

By The Associated Press | From Page: A5

 
Judge expresses doubt about constitutionality of no-fly list

By The Associated Press | From Page: A5

 
.

Opinion

Solano College news makes me sick

By Letter to the Editor | From Page: A8, 2 Comments

 
GOP should plan for post-Obamacare world

By Ramesh Ponnuru | From Page: A8, 16 Comments

 
Editorial Cartoon: Jan. 31, 2015

By Daily Republic Syndicated Content | From Page: A8

.

Living

Today in History: Jan. 31, 2015

By The Associated Press | From Page: A2

 
Community Calendar: Jan. 31, 2015

By Susan Hiland | From Page: A2

Horoscopes: Jan. 31, 2015

By Holiday Mathis | From Page: B7

 
My recently widowed mother is already thinking about re-marrying

By Kathy Mitchell and Marcy Sugar | From Page: B7

Five ways 3D-printed food will change the way we eat

By The Washington Post | From Page: B10, 1 Comment

 
.

Entertainment

TVGrid

By Daily Republic Syndicated Content | From Page: B5

 
Shakira gives birth to 2nd baby with Spanish football star

By The Associated Press | From Page: A7

 
List: 10 Super Bowl ads you’ll be talking about

By The Associated Press | From Page: A7

Rod McKuen, mega-selling poet and performer, dies at 81

By The Associated Press | From Page: A7

 
Miranda Lambert leads ACM Awards with 8 nominations

By The Associated Press | From Page: A7

.

Sports

 
Mustangs ride away from Indian’s home court with 66-60 victory

By Marcus Lomtong | From Page: B1 | Gallery

 
Hayward, Utah Jazz upset Golden State Warriors 110-100

By The Associated Press | From Page: B1

LeBron returns, Love, Irving team for 44, as Cavs top Kings

By The Associated Press | From Page: B1

 
Ko takes lead at LPGA opener, closes in on golf history

By The Associated Press | From Page: B2

Djokovic beats Wawrinka to reach fifth Australian Open final

By The Associated Press | From Page: B2

 
Kings’ Cousins to replace Kobe Bryant in All-Star game

By The Associated Press | From Page: B2

Laird leads as Tiger shoots 82 and misses the cut

By The Associated Press | From Page: B2

 
Seau, Warner, Pace first-time Hall eligibles

By The Associated Press | From Page: B2

N.H. Speedway general manager faces lewdness charge

By The Associated Press | From Page: B2

 
Judge: Jury can watch Super Bowl unless Hernandez mentioned

By The Associated Press | From Page: B2

Blackhawks Hall of Famer Stan Mikita has brain disorder

By The Associated Press | From Page: B2

 
Carroll says decision is Sherman’s if baby arrives early

By The Associated Press | From Page: B3

NFL’s Goodell seeks to look past ‘tough year,’ to future

By The Associated Press | From Page: B3

 
This date in sports history for Jan. 31, 2015

By The Associated Press | From Page: B4

 
.

Business

US consumer confidence at highest level in a decade

By The Associated Press | From Page: A1

 
Companies steering clear of Super Bowl name

By The Associated Press | From Page: B5, 1 Comment

.

Obituaries

Danica Gojkovich Ryder

By Nancy Green | From Page: A4

 
Anneliese Edith (Luckner) Fraser

By Nancy Green | From Page: A4

.

Comics

Frank and Ernest

By Daily Republic Syndicated Content | From Page: B6

 
Baldo

By Daily Republic Syndicated Content | From Page: B6

Rose is Rose

By Daily Republic Syndicated Content | From Page: B6

 
Baby Blues

By Daily Republic Syndicated Content | From Page: B6

Sally Forth

By Daily Republic Syndicated Content | From Page: B6

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: B6

Wizard of Id

By Daily Republic Syndicated Content | From Page: B6

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: B6

Beetle Bailey

By Daily Republic Syndicated Content | From Page: B6

 
Pickles

By Daily Republic Syndicated Content | From Page: B6

Blondie

By Daily Republic Syndicated Content | From Page: B6

 
Zits

By Daily Republic Syndicated Content | From Page: B6

Garfield

By Daily Republic Syndicated Content | From Page: B6

 
Peanuts

By Daily Republic Syndicated Content | From Page: B6

B.C.

By Daily Republic Syndicated Content | From Page: B6

 
Dilbert

By Daily Republic Syndicated Content | From Page: B6

Word Sleuth

By Daily Republic Syndicated Content | From Page: B7

 
Sudoku

By Daily Republic Syndicated Content | From Page: B7

Crossword

By Daily Republic Syndicated Content | From Page: B7

 
Bridge

By Daily Republic Syndicated Content | From Page: B7

Cryptoquote

By Daily Republic Syndicated Content | From Page: B7

 
.

Home Seller 1/31/2015

Quirky add-ons a common feature of celebrity homes

By The Associated Press | From Page: HSR2

5 ways to make a kitchen more germ-free

By The Associated Press | From Page: HSR3

Average US rate on 30-year mortgage rises to 3.66 percent

By The Associated Press | From Page: HSR3

Real estate transactions for Jan. 31, 2015

By Daily Republic | From Page: HSR3