Business
Foreign Stocks Fluctuate, As Bigwigs Face Congress
The stock market turned mostly higher Wednesday, following the lead of financial stocks as the heads of several big banks testified before the United States Congress about the financial crisis.
Stocks fluctuated for much of the morning but strengthened as the questioning of bank officials proceeded with little in the way of confrontation. Investors were being choosy, moving into consumer stocks in response to a higher profit forecast from Kraft Foods Inc. but selling energy stocks as the price of oil fell. Industries seen as safer in a weak economy, like health care and utilities, rose.
Executives including Goldman Sachs Group Inc. Chairman and CEO Lloyd Blankfein, JPMorgan Chase & Co. CEO James Dimon, Morgan Stanley Chairman John Mack and Bank of American Corp. CEO Brian Moynihan appeared before the Financial Crisis Inquiry Commission. It is the first meeting of the bipartisan, 10-member panel, which is investigating the near collapse of the financial system in the fall of 2008.
While the executives agreed that banks’ actions contributed to the crisis that paralyzed the credit markets and worsened the recession, investors did not hear anything from the hearings that would encourage them to flee financial stocks.
Still, there is growing public discord over big profits and bonuses at financial companies that has the White House considering a levy on banks to cover about $120 billion in taxpayer losses from the government’s industry bailout. Opponents say it could jeopardize a recovery by the nation’s biggest banks.
Scott Colyer, chief executive at Advisors Asset Management in Monument, Colo., is concerned that imposing a tax on banks would threaten his expectation for a strong economic rebound in 2010. “You don’t want to take money from a group that you’re trying to prop up,” he said.
The questions about banks underscored how many concerns investors are juggling. After a strong first week of the year in stocks, a disappointing profit report from Alcoa Inc. late Monday is causing concern that the robust earnings investors had been expecting for the final quarter of 2009 might not materialize.
In much of 2009, companies boosted earnings by laying off workers and slashing expenses. But cost-cutting cannot be relied upon forever so investors are looking for signs that increases in revenue will lift earnings.
The improved forecast from Kraft was welcome news but its increased projection matches what analysts had already been predicting. Intel Corp. is expected to post results Thursday, and JPMorgan Chase & Co. is scheduled to report on Friday.
In midday trading, the Dow Jones industrial average rose 40.66, or 0.4 percent, to 10,667.92. The broader Standard & Poor’s 500 index rose 5.33, or 0.5 percent, to 1,141.55, and the Nasdaq composite index rose 7.21, or 0.3 percent, to 2,289.52.
On Tuesday, the Dow fell 37 points, or 0.3 percent, while the S&P 500 index and the Nasdaq lost each lost about 1 percent on concern about China’s bank policies and Alcoa’s results.
Bond prices fell after jumping Tuesday, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.75 percent from 3.72 percent late Tuesday.
Crude oil fell $2.05 to $78.74 per barrel on the New York Mercantile Exchange. The drop in oil hurt energy companies, which also hurt stocks.
The dollar fell against most other major currencies, while gold fell.
Meanwhile, investors sold shares of Google Inc. after the Internet search company threatened to withdraw from China. The company said it will no longer censor its search results in the country after finding that computer hackers had led human-rights activists to reveal their e-mail accounts to outsiders. Google’s public complaints were a rare show of protest in the country and an about-face for the company that long said it would abide by Chinese laws that block some political and socially sensitive content. Google fell $8.97, or 1.5 percent, to $581.51, while Baidu rose $51.51, or 13.3 percent, to $438.00.
“Payment of tuition fees for undergraduate/postgraduate studies shall be subject to a maximum limit of $25,000.00 per semester,” the Manual states.
The expansion of international card limits also reflects growing confidence among lenders that foreign exchange liquidity has improved enough to support retail dollar transactions.
Speaking recently at the BusinessDay 14th Annual CEO Forum in Lagos, CBN Olayemi Cardoso, governor of the CBN said buying and selling activities now increasingly determine outcomes in the foreign exchange market, unlike in the past when market participants relied heavily on routine Central Bank interventions.
According to Cardoso, Nigeria’s net foreign exchange reserves have risen from just over $3 billion at the start of the reform programme to more than $40 billion, while gross reserves have climbed to about $52 billion, providing stronger confidence for investors and enabling the Central Bank to reserve interventions for periods of market stress rather than day-to-day liquidity management.
The restoration and expansion of international naira card spending limits are increasingly being seen as one of the clearest signs that the benefits of the CBN’s foreign exchange reforms are beginning to reach households, students and businesses making legitimate cross-border payments.
The Secretary-General and Chief Executive Officer, WEC, Dr Angela Wilkinson, disclosed this in a statement, last Thursday.
“Nigeria’s participation comes at a pivotal time as the country seeks to expand energy access, strengthen energy security, accelerate gas development and mobilise the capital required for industrialisation and sustainable economic growth.
“WEC Nigeria will convene leaders from across the energy ecosystem, apply the WEC’s globally recognised Energy Trilemma framework to Nigeria’s unique context, and promote evidence-based dialogue, practical collaboration and informed policymaking.
“It will also ensure that Nigerian and broader African perspectives contribute meaningfully to global energy conversations,” she said.
Wilkinson expressed confidence that Nigeria would play a significant leadership role at the World Energy Congress scheduled for Riyadh in April 2027 and beyond.
The statement also quoted the Chairman of WEC Nigeria, Isa, as describing the country’s participation as an opportunity to deepen national and African leadership within the global energy community through practical solutions tailored to regional development priorities.
He said the platform would promote collaboration across sectors and attract sustainable investments into Nigeria’s energy sector.
The Chief Executive Officer of WEC Nigeria, Wunti, was quoted in the statement as saying that the council would connect leadership, evidence and investment to build a secure, affordable and sustainable energy system.
“This system will be capable of driving economic growth and shared prosperity.”
According to him, the platform will also connect Nigerian institutions and businesses with international knowledge, technology, partnerships and investment opportunities through the World Energy Council’s global network.
Recall that WEC, founded in 1923, is the world’s oldest independent and impartial community of energy leaders and practitioners, advancing informed, collaborative and practical action across the global energy system.
-
Business10 hours ago
PTDF Committed To Tinubu’s Development Plan – CEO
-
Education11 hours ago
Environmental Education Remains Critical Tool To Address Environmental Challenges Says Experts
-
Oil & Energy10 hours ago
Civil Society Demands Accountability over N60Billion AKS Oil Producing Communities
-
Business10 hours ago
NMDPRA, NUPRC To Strengthen Domestic Crude Supply Chain ………, Says Nigeria’s Refining Capacity Hits 1.25 Million bpd
-
City Crime5 hours agoTinubu Appoints Ex-Tide Staff Registrar Of Chartered Chemists
-
News10 hours ago
Court Hears ATROMPCON Leadership Suit Today
-
News9 hours agoPolice Nab Kidnap Syndicate, Arrest Five In Rivers
-
Sports9 hours agoRivers-born Chess Player Clinches Third Position At World Amateur Rapid Chess Championship