The major averages snapped their five-day losing streak with a broad-based advance on Friday. The S&P 500 (+1.3%) reclaimed its 100-day moving average (2,007) and narrowed its weekly decline to 1.3%.
The stock market was on shaky footing in the early going, but the overall risk tolerance was improved by a rebound in crude oil, which continued climbing throughout the session to end higher by 4.6% at $48.50/bbl. That advance bolstered the energy sector (+3.2%), which spent the day in the lead.
Meanwhile, the remaining cyclical groups ended a bit closer to their flat lines. The materials sector (+1.7%) outperformed with help from steelmakers and miners while the discretionary sector (+1.3%) settled in line with the broader market. As for the remaining three growth-sensitive groups, financials (+1.2%), industrials (+0.7%), and technology (+0.9%) spent the day behind the broader market.
The financial sector could not catch up to the S&P 500 as Goldman Sachs (GS 177.23, -1.26) weighed. The stock fell 0.7% despite better than expected results from the investment bank. Also of note, foreign exchange broker FXCM (FXCM 12.63, 0.00) agreed to terms on a $300 million lifeline provided by Leucadia National (LUK 21.84, +0.20) after yesterday's surge in the Swiss franc caused about $225 million in negative client balances at FXCM. Shares of FXCM were halted throughout the session after surrendering almost 90.0% in pre-market action.
Elsewhere, the technology sector struggled to keep pace with the market as Apple (AAPL 105.94, -0.88) weighed. The largest sector component lost 0.8% while most other heavily-weighted tech names settled with gains. On the earnings front, Intel (INTC 36.45, +0.26) gained 0.7% after beating bottom-line estimates. For its part, the PHLX Semiconductor Index (+1.1%) ended just behind the S&P 500.
Over on the countercyclical side, consumer staples (+0.8%) and utilities (+0.9%) underperformed throughout the day while telecom services (+1.7%) and health care (+1.9%) spent the day among the leaders. The health care sector was bolstered by high-beta biotechnology names, evidenced by a 3.3% gain in the iShares Nasdaq Biotechnology ETF (IBB 317.82, +10.12). The ETF was able to add 1.4% for the week versus a slim uptick of 0.2% for the health care sector.
Treasuries notched their highs in the early morning before spending the session in a steady retreat that sent the benchmark 10-yr yield higher by 11 basis points to 1.82%.
Friday's participation was ahead of average with 950 million shares changing hands at the NYSE floor.
Economic data included CPI, Industrial Production, and Michigan Sentiment:Bond and equity markets will be closed on Monday for Martin Luther King Day.
- The CPI declined 0.4% in December after declining 0.3% in November while the Consensus expected a decline of 0.4%
- Prices are up only 0.8% year-over-year, which is the smallest increase since October 2009
- The energy index, which has fallen for the past six consecutive months, declined 4.7% in December
- Food prices increased 0.3% in December, up from a 0.2% increase in November
- Excluding food and energy, core CPI was flat in December (consensus +0.1%) after increasing 0.1% in November
- Industrial production declined 0.1% in December after increasing an unrevised 1.3% in November (consensus -0.1%)
- The decline in industrial production can be blamed on warmer-than-normal temperatures that reduced the demand for heating. According to the National Climatic Data Center, December 2014 was the second warmest December on record. That was a large reversal from November, which was the coldest November since 2000. The shift in temperatures resulted in a 7.3% decline in utilities production
- Capacity utilization hit 79.7% while the consensus expected a reading of 79.9%
- The University of Michigan Consumer Sentiment Index jumped to 98.2 in the preliminary January reading from 93.6 in December while the consensus expected an increase to 94.1
- That was the highest reading since the index reached 103.8 in January 2004
On Tuesday, the NAHB Housing Market Index will be released at 10:00 ET.
- Dow Jones Industrial Average -1.8% YTD
- S&P 500 -1.9% YTD
- Nasdaq Composite -2.2% YTD
- Russell 2000 -2.5%
Brazil power rates could rise as much as 60% in 2015 - press- price hikes to cover the higher cost of power and to pay for subsidies for system expansion, low-income consumers and remote communities
- reiterates will be active in markets if it is necessary- gradual cap exit was impossible- capital controls are not a realistic option- entire Board backed the cap exit- negative rates are an effective instrument
2015-01-16 18:35:24.110 GMT
(Updates with shares in fourth paragraph).
By Christopher Donville
(Bloomberg) -- Canadian Industry Minister James Moore said
he has been assured by BlackBerry Ltd. Chief Executive Officer
John Chen that there’s no substance to reports that Samsung
Electronics Co. had approached the company about an acquisition.
“I talked to him yesterday and he said it’s a rumor and
that there’s no truth to it,” Moore said in an interview Friday
in Vancouver.
Reuters reported this week that Samsung approached
Waterloo, Ontario-based BlackBerry with an initial takeover
offer of $13.35 to $15.49 a share, citing an unnamed person and
documents. BlackBerry and Samsung both put out statements
denying the report.
BlackBerry rose 1.4 percent to $10.25 at 1:12 p.m. in New
York, above its closing price on Jan. 13 before the Reuters
report, valuing the smartphone marker at about $5.4 billion.
Foreign acquisitions of Canadian companies for more than
C$344 million ($287 million) must be vetted by the government.
Since 2009, they can also face a national security review,
largely by a secret committee of senior officials that includes
the heads of two spy agencies.
In October 2013, the government rejected Manitoba Telecom
Services Inc.’s sale of its Allstream unit to an investment firm
co-founded by Egyptian billionaire Naguib Sawiris, citing
security concerns. The government didn’t provide details on what
those concerns were.
Moore said each deal is considered on its own merits and a
BlackBerry sale wouldn’t be prejudged simply because of the
company’s role in securely managing government devices.
For Related News and Information:
BlackBerry Pegged at $12 Makes Reported Bid Look Good: Real M&A
BlackBerry Falls After Denying Report of Talks With Samsung (1)
BlackBerry’s Patent Portfolio Is Wireless Trove for Acquirer (2)
Top Technology News: TTOP <GO>
Top Media News: TOP MED <GO>
--With assistance from Gerrit De Vynck in Toronto.
To contact the reporter on this story:
Christopher Donville in Vancouver at +1-604-331-1310 or
cjdonville@bloomberg.net
To contact the editors responsible for this story:
Sarah Rabil at +1-212-617-5992 or
srabil@bloomberg.net
Cecile Daurat, Stephen West
Last year was the hottest in earth’s recorded history, scientists reported on Friday, underscoring scientific warnings about the risks of runaway emissions and undermining claims by climate-change contrarians that global warming had somehow stopped.
Extreme heat blanketed Alaska and much of the western United States last year. Several European countries set temperature records. And the ocean surface was unusually warm virtually everywhere except around Antarctica, the scientists said, providing the energy that fueled damaging Pacific storms.
In the annals of climatology, 2014 now surpasses 2010 as the warmest year in a global temperature record that stretches back to 1880. The 10 warmest years on record have all occurred since 1997, a reflection of the relentless planetary warming that scientists say is a consequence of human emissions and poses profound long-term risks to civilization and to the natural world.
Of the large inhabited land areas, only the eastern half of the United States recorded below-average temperatures in 2014, a sort of mirror image of the unusual heat in the West. Some experts think the stuck-in-place weather pattern that produced those extremes in the United States is itself an indirect consequence of the release of greenhouse gases, though that is not proven.
Several scientists said the most remarkable thing about the 2014 record was that it occurred in a year that did not feature El Niño, a large-scale weather pattern in which the ocean dumps an enormous amount of heat into the atmosphere.
Longstanding claims by climate-change skeptics that global warming has stopped, seized on by politicians in Washington to justify inaction on emissions, depend on a particular starting year: 1998, when an unusually powerful El Niño produced the hottest year of the 20th century.
With the continued heating of the atmosphere and the surface of the ocean, 1998 is now being surpassed every four or five years, with 2014 being the first time that has happened in a year featuring no real El Niño pattern. Gavin A. Schmidt, head of NASA’s Goddard Institute for Space Studies in Manhattan, said the next time a strong El Niño occurs, it is likely to blow away all temperature records.
“Obviously, a single year, even if it is a record, cannot tell us much about climate trends,” said Stefan Rahmstorf, head of earth system analysis at the Potsdam Institute for Climate Impact Research in Germany. “However, the fact that the warmest years on record are 2014, 2010 and 2005 clearly indicates that global warming has not ‘stopped in 1998,’ as some like to falsely claim.”
Such claims are unlikely to go away, though. John R. Christy, an atmospheric scientist at the University of Alabama in Huntsville who is known for his skepticism about the seriousness of global warming, pointed out in an interview that 2014 had surpassed the other record-warm years by only a few hundredths of a degree, well within the error margin of global temperature measurements.
“Since the end of the 20th century, the temperature hasn’t done much,” Dr. Christy said. “It’s on this kind of warmish plateau.”
NASA and the other American agency that maintains long-term temperature records, the National Oceanic and Atmospheric Administration, issued separate data compilations on Friday that confirmed the 2014 record. A Japanese agency had released preliminary information in early January showing 2014 as the warmest year.
The last scientific group that curates the world’s temperature record, in Britain, is scheduled to report in the coming weeks.
“Why do we keep getting so many record-warm years?” Dr. Schmidt asked in an interview. “It’s because the planet is warming. The basic issue is the long-term trend, and it is not going away.”
February 1985 was the last time global temperatures fell below the 20th-century average for a given month, meaning that no one younger than 30 has ever lived through a below-average month.
The contiguous United States set its temperature record in 2012. But, mainly because of the unusual chill in the East last year, 2014 was only the 34th warmest year on record for the lower 48 states.
That cold was brought into the interior of the country by a loop in a current called the jet stream that allowed Arctic air to spill southward. But an offsetting kink allowed unusually warm tropical air to settle over the West, large parts of Alaska and much of the Arctic.
A few recent scientific papers say that such long-lasting kinks in the jet stream have become more likely because global warming is rapidly melting the sea ice in the Arctic, disturbing longstanding weather patterns. But many leading scientists are not convinced on that point.
Whatever the underlying cause, last year’s extreme warmth in the West meant that Alaska, Arizona, California and Nevada all set temperature records. Some parts of California had basically no winter last year, with temperatures sometimes running 10 or 15 degrees above normal for the season.
Those conditions exacerbated the severe drought in California, which has been alleviated only slightly by recent rains. Some small towns have run out of water, the sort of impact that scientists fear will become commonplace as global warming proceeds in the coming decades.