Tag Archives: Business

Dow soars to record high as it crosses 22,000 mark for the first time


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Weak dollar and bumper company earnings drive Wall Street surge, lifting US equities to new highs and putting DJIA on track for sixth record close in a row

The Dow Jones Industrial Average has gone above the 22,000 mark for the first time, boosted by bumper company earnings and a weak dollar, with investors shrugging off the latest upheavals in the White House.

The move comes five months after the Dow passed the 21,000 level, having previously crossed 20,000 in January. This year it is up about 11%, and since the election of Donald Trump as US president in November, it has risen more than 20%. Meanwhile, the S&P 500 and Nasdaq Composite are also near record highs.

This latest Wall Street surge has been helped by forecast-beating results from Apple, which also pleased investors by dismissing suggestions its forthcoming iPhone 8 could be delayed. Apple shares jumped nearly 6% to a record $159 (120), before slipping back to $157 by lunchtime.

The Dow had added 0.2% to 22,007 by lunchtime after hitting a peak of 22,036 during the morning. It is still on track for another record close, the sixth in a row.

US markets have been buoyed for much of this year by hopes that President Trump would unveil tax reforms and infrastructure plans to boost the countrys economy. However, recently his plans to abolish the Obamacare healthcare system received a setback, casting doubt on his ability to push through the rest of his legislative programme. The threat of impeachment is also hovering in the background, while several key members of his team in the White House have resigned or been fired.

However, strong company results from the likes of Goldman Sachs, Boeing and Apple have kept investors buying despite the concerns over Trump. Two-thirds of the S&P 500 companies have reported quarterly results, for the three months to the end of June, and about 72% of them have beaten expectations.

Meanwhile, the dollar has weakened, partly on concerns over Trump and also because of the growing belief that the US Federal Reserve will not raise interest rates again in the immediate future with the economy showing signs of running out of steam.

Bob Doll, chief equity strategist at Nuveen Asset Management, told Bloomberg TV: Returns on [cash] are low, bonds are sitting there doing not much and earnings are coming through. So stocks are the story.

On Wednesday, new figures showed weaker than expected US jobs figures for July, with private sector employment rising by 178,000, rather than the 185,000 predicted by economists. On Friday, the official non-farm payroll numbers are forecast to show a 180,000 increase, down from Junes figure of 187,000.

The dip in the dollar which benefits US exporters pushed the pound to an 11-month high of $1.3245 against the US currency.

Michael Hewson, chief market analyst at CMC Markets UK, said: US investors have continued to turn a deaf ear to the ongoing political intrigue unfolding in Washington DC [and] for now the direction of travel continues to remain positive.

Read more: https://www.theguardian.com/business/2017/aug/02/dow-soars-to-record-high-as-it-crosses-22000-mark-for-the-first-time


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Amazon founder Jeff Bezos briefly becomes world’s richest man


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Share price jump of 40% in 2017 made founder worth $91bn for a short while leapfrogging the fortune of Microsoft founder Bill Gates

The founder of Amazon, Jeff Bezos briefly overtook Microsofts Bill Gates to become the worlds richest person.

Bezos leapfrogged Gates, who has been the richest man on the planet since 2013, after a rise in the share price of Amazon ahead of its latest results due Thursday night.

According to a real-time billionaires index compiled by Forbes, the rise pushed the value of Bezoss fortune to $91bn (69bn) compared with Gates wealth of $90bn. Their riches are calculated on the share prices of their respective companies and at the current values Bezoss stake is twice as big as carmaker Ford.

But the Amazon share price fell back leaving Gates on top, but with less than $1bn separating them.

Bezos born in Albuquerque, New Mexico, in 1964 keeps a relatively low profile, but has used some of the wealth he has amassed to buy the Washington Post and invest in space travel through Blue Origin, a company he founded in 2000.

He began Amazon in 1994 when he sold books from his garage in Seattle before expanding into a huge range of other products and capturing the global rush to online shopping.

Amazon now accounts for 43% of everything sold online in the US and 64 million people have signed up for its Prime service which gives access to free deliveries and video streaming. Amazon shares have soared this year making the company worth more than $500bn.

At the start of 2017, Bezos was ranked fourth-richest in the world, behind Gates, the investor Warren Buffett and Amancio Ortega, who founded Inditex, the company behind retailer Zara.

The share price rally comes despite accusations by Donald Trump, during the US election campaign, that Amazon was getting away with murder, tax-wise. He said Bezos was using the Washington Post for political influence.

In January, Bezos pledged the full legal resources of his company to fight the travel ban instituted by the new US president against seven Muslim-majority nations.

Amazon floated on the stock market in 1997. Every year Bezos reprints the letter he sent to shareholders that year, insisting it is only Day 1 for the company and pledging to focus on the long-term and be the market leader.

He has not joined the club of billionaires who pledge to hand over the majority of fortunes to charity started by Gates and his wife, along with Buffett but recently tweeted to ask for philanthropic ideas to help in the short term, which he said was in contrast to his long-term approach to running the business.

I want much of my philanthropic activity to be helping people in the here and now short term at the intersection of urgent need and lasting impact.

Forbes started tracking billionaires in 1987 and Bezos is the seventh person to hold the title of the worlds richest person. In a report on his rise to the top of the rankings, Forbes said Bezos would not be at the top if Gates had not given so much of his wealth away and has calculated that Gates has been the richest person in the world for more than half the 30 years it had been watching the wealth of billionaires.

The closing share price of Amazon and Microsoft on Thursday will determine whether Bezos cements his position at the top of the league. Microsofts shares were down on Thursday.

Technology stocks have been outpacing the rest of the US stock market, but wobbled last month amid concerns that the sector might run of steam. Amazon and others then started to rally again. It remains to be seen whether Bezos is able to permanently claim the top slot.

Amazon has now expanded beyond retailing. It now sells cloud computing services to thousands of businesses ranging from Netflix to the UKs ministry of justice. It also makes TV shows and the Echo smart speaker, which allows users to speak to Alexa, an electronic personal assistant.

Read more: https://www.theguardian.com/business/2017/jul/27/amazon-founder-jeff-bezos-worlds-richest-man-bill-gates


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Tech shares keep sinking amid concerns sector is slowing

Nasdaq falls in early trading after sinking 1.8% on Friday, with analysts expecting continued uncertainty

Shares in technology companies the driver behind recent record stock market gains kept falling on Monday as investors worried the sector was running out of steam.

On Friday, the tech-heavy Nasdaq Composite Index, home to Alphabet, Apple, Amazon, Facebook, Microsoft and others, fell 1.8% and the slide continued on Monday, with the index down another 0.52% as market analysts anticipated more wobbles ahead of a crucial meeting of the Federal Reserve this week.

Technology stocks have done far better than the rest of the market this year and they were trading close to all-time highs before Fridays drop. The S&P 500 technology index shed 2.7% on Friday for one of its worst days of the year.

The climb has made fortunes for investors, and for tech entrepreneurs. Amazon founder Jeff Bezos has seen his net worth soar by almost $20bn (16bn) in the past five months to $85.2bn. Bezoss fortune is closing in on that of Bill Gates, the co-founder of Microsoft, whose net worth is $89.3bn, according to the Bloomberg Billionaires Index. Bezos could become the worlds richest man if the tech stocks continue to grow.

Nasdaq chart

Jack Ablin, chief investment officer at BMO Private Bank, said it was too early to say whether the last two days of trading would develop into something worse for the tech sector but added that there were worrying signs.

The tech sector has been the stock markets best performer, and some people may be taking profits or rotating their investments into different sectors, he said. But there is also some concern about what the Fed will do.

Stock markets have been bolstered by the huge amounts of money the Fed and other central banks have poured into bond markets in an attempt to keep interest rates at record lows. Low rates have made stock investments more attractive but the Fed has signaled that rates in the US are now on the rise, albeit from a low base.

The Fed meets on Tuesday and Wednesday this week and its chairwoman, Janet Yellen, is expected to announce another rate rise at her press conference when the meeting concludes. Everyone fully expects a rate rise this time, said Ablin. What matters is what the Fed says about the rest of the year. Given their gains, tech is probably going to be the most sensitive sector to be affected by that. We will know more after Wednesday.

Strong quarterly earnings have helped technology stocks fill a void left by financial and industrial stocks after a post-election rally faded. The S&P 500 technology index has risen 18.5% this year and is on track to register its best yearly performance since 2014.

The real heavy lifting, or 40% of the move, that we saw was really on the back of a handful of technology stocks, said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets. So when you have a trade that is so crowded, that unwind becomes as dramatic as the one we saw on Friday.

Investors saw an opportunity to book profits on Friday after Apple shares plunged amid reports that the company is using slower modems in forthcoming iPhones, compared with those used in rival phones.

Apple share price

Shares of the worlds most valuable publicly listed company were off 2.46% at $145.32 on Monday.

Mizuho Securities also cut its rating on Apples stock to neutral from buy on Monday, citing it has outperformed this year and enthusiasm over the upcoming product cycle is fully captured at current levels.

Fergus Shaw, fund manager at Cerno Capital, told Reuters: This is the nature of the tech sector. Valuations do from time to time become very stretched and they come back and anyone who has paid a very high valuation might experience some short-term pain.

Read more: https://www.theguardian.com/business/2017/jun/12/tech-industry-stock-market-nasdaq