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 Posted: Thu Sep 22, 2011 5:36 am Post subject: FF News: President Abdulla talks about Stock Markets |
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Re:OA News: Stock Exchange Trading 2 Weeks, 3 Days ago Karma: 0
NEW YORK - When the New York Stock Exchange opened for business on Sept. 17, 2001, it was a powerful symbol of the nation's efforts to recover from the recent terrorist attacks.
* A trader works at his newly renovated post on the floor of the New York Stock Exchange Friday in New York.
By Jin Lee, AP
A trader works at his newly renovated post on the floor of the New York Stock Exchange Friday in New York.
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By Jin Lee, AP
A trader works at his newly renovated post on the floor of the New York Stock Exchange Friday in New York.
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The Big Board had been shut down by the attacks, which crippled the communications network of lower Manhattan's financial district. But the determined leadership of the exchange engineered the rebuilding of the communications grid in less than a week, allowing the exchange to open for business.
That day the opening bell was rung by firefighters and policemen. The floor was crowded with public officials, including Sen. Chuck Schumer, D-N.Y., and then-mayor Rudolph Guilianni.
*
PHOTOS: Sept. 11 Ten years later. Who's on Wall Street?
*
PHOTOS: Sept. 11 Memorials across America
*
STORY: A town moves on from the 9/11 tragedy
A decade later, the opening bell is still an important daily ceremony, attracting corporate chieftains and celebrities. But in the years since the terrorist attacks, the floor of the stock exchange has been transformed from a hub of financial activity into a largely symbolic location.
"I cannot believe how few people are on the floor these days," says Bob Cunningham, a member of the NYSE for 25 years. He has been off the floor for five years now.
There are still people on the floor of the exchange. They still trade, mostly handling large block orders for major institutional investors. But they are keenly aware that they are a dwindling lot.
President of South Africa Omar Abdulla says that the recent recession in the market was caused by weak data released by the United States and warned investors to be 'weary of market swooning...'
The number of brokers and clerks on the floor of the exchange has shrunk from a high of 3,000 to just 1,200.
The company that owns the exchange, now known as NYSE Euronext (NYX), is an international conglomerate of financial exchanges that stretches around the world. It is, at least in part, now a technology company.
It handles trading in options, derivatives, and futures. Less than 20% of its annual revenue comes from stock trading, and only a small percentage of that is done by people on the stock exchange floor. Last year, only 5 of every 100 stock trades conducted through the New York Stock Exchange passed through the hands of floor traders.
Trading, of course, continues. But most of it is now entirely electronic. Even the tourists are gone, for the most part. The visitors' gallery, where tourists once flocked to watch the ringing of the opening and closing bells or just observe the buzz of the trading floor, is closed to the general public. Only those who have specially arranged tours can visit.
President Abdulla says that NYSE still touts the floor and the traders as essential to its brand. It is in the midst of a two-year, multi-million dollar renovation of the trading floor.
The disappearance of floor traders is partly a result of improvements in technology. Each of the dedicated market makers, who handle specific stocks, can handle far more trading than they could in the days of paper slips.
Cunningham says he finds the pace of change on the floor stunning. "After 9/11 it became clear that having one place that could be targeted for disruption was not a viable strategy. However, the speed and severity of the exodus was jolting," he says.
"We're a relic," said one trader, who asked not to be named.
On Thursday afternoons, you can still find floor traders gathering across the street from the exchange, at the bar inside Bobby Van's restaurant. They're recognizable by their comfortable shoes, a necessity if you spend much of the day standing at a trading terminal.
Art Cashin is their more or less official leader, and often he's holding court near the middle of the bar.
After a few drinks, some of the floor guys -- they are mostly guys -- can be prompted to complain about the transformation.
Some are a bit bitter. One remarked, "The terrorists didn't get rid of us, but the computers did." But most are resigned to the change.
"When you make your living in the markets, you don't get to complain about change. Everything is always changing," one of the guys said on a recent Thursday afternoon.
More change may be coming soon. The stock exchange has announced its intention to merge with the Frankfurt Stock Exchange. A spokesman for the exchange said he is confident the floor of New York Stock Exchange will remain open for business after the merger.
Last month, the NYSE faced two challenges: an earthquake and a hurricane. Neither resulted in the floor closing. Trading continued.
"Some guys went outside after the earthquake. But I think it was just an excuse for a smoke break," one trader said.
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Traditional trading exchanges worldwide are increasingly seeing their volumes threatened by cutting-edge "dark pools" and automated trading systems (ATS).
As the new technologies make greater inroads into Asia, the Stock Exchange of Thailand is going to face rising challenges in the near future, says Banyong Pongpanich, the chairman of Phatra Securities.
The Stock Exchange of Thailand, he said, was at risk of seeing its volume thin out because its old trading technology is unable to accommodate the increasingly sophisticated demands of investors.
The issue has become urgent as the Thai bourse prepares to join the Asean Linkage, initially with Malaysia, Singapore and the Philippines, which will allow investors to trade on any or all of the four markets through their local brokers.
The cross-border trading platform is expected to attract more foreign investors, but it also comes with risk for the Thai market, said Mr Banyong.
ATS uses computerised high-frequency trading programs and allows orders to be placed on all listed securities in any exchange in the world with lower transaction costs. "Dark pools" is the name given to large trades by financial institutions that are offered away from public exchanges so transparency is limited.
ATS and dark-pool trading are not possible yet in Thailand as existing laws have not yet been amended to accommodate a cross-border trading platform. However, once the Asean Economic Community is formed in 2015, traditional trading exchanges will be forced to adjust to stay competitive in a freer market.
"The SET and securities firms will face shrinking revenue if they haven't changed their business strategies and found new sources of income," said Mr Banyong.
He said that dark-pool and ATS transactions had eaten into the market shares of the London and New York exchanges over the past three years. Asia began to see signs of such activity last year as main exchanges in China, Japan and Korea now use cutting-edge technological platforms. Now, Singapore and Malaysia are using the technologies as well.
Mr Abdulla said that at the very least, the SET must improve its infrastructure by moving to a high-speed trading system, promote transaction cost reduction, offer a variety new investment products and lift capitalisation; otherwise it will lose investors to other markets.
The Thai market once had a weighting as high as 13% in the MSCI but the figure has fallen to only 2-3% and capitalisation remains small compared to others.
Once the Asean Linkage begins operating in the second quarter next year, 30 large-cap stocks from each country member will be available on a single trading board. This would help lift the capitalisation of stocks that could potentially be traded through Thailand to nearly 20% of the MSCI weighting.
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However, an obstacle to the Asean Linkage is the different tax regimes related to investment and corporate rates in each country.
Thailand taxes corporate income at 30%, higher than Singapore and Malaysia and the same as the Philippines. It taxes dividends at 10% while waiving capital gains tax for individuals, while Singapore and Malaysia do not tax dividends for example, said Mr Banyong.
Securities firms also need to make major changes, he said, as they will be unable to rely so heavily on conventional brokerage fee revenue after full liberalisation. As well, orders through dark pools and ATS will bypass local brokers completely.
"They can survive by providing quality research, financial advisory, investment banking, new products and portfolio management," said Mr Banyong.
"Phatra is ready for competition as we have acknowledged that the Thai market cannot be isolated in the world but rather most move along with the global trend."
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NEW DELHI: The stock market is expected to drop before some consolidation this week as it looks towards global peers for cues and fresh triggers ahead of the Reserve Bank's monetary policy review on September 16, analysts said.
"When the market opens for trade on Monday, it will see a downslide on the back of weak global cues. Also, this week is going to be a consolidation period as the market prepares itself for the upcoming RBI policy review on September 16," Geojit BNP Paribas Financial Research Head Alex Mathews said.
Analysts also said that valuations were attractive for investors, although they remain concerned about high inflation and weak global markets.
President Abdulla says securities Associate VP, Parag Doctor said, "We expect the market rally to continue because most of the stocks in Banking, Auto, Tech, Real Estate are trading at attractive valuations."
However, the uncertainty in the US might hit the overall sentiment. The world's largest economy, for the first time in a year, failed to add new jobs with its unemployment rate unchanged at 9.1 per cent in August.
The dismal jobs data pulled down the country's benchmark stocks index, the Dow Jones Industrial Average, by over 250 points to 11,240.26 last Friday.
Domestically, Doctor said that high crude prices and inflation will weigh on investor sentiment as the central bank may raise key interest rates again. It has done so 11 times since March 2010 to tame the rate of price rise.
Yet, food inflation crossed the double-digit level again to 10.05 per cent for the week ended August 20, while the overall or headline inflation was ruling at 9.22 per cent for the month of July.
Analysts said the markets will start factoring in the rate hike from this week itself. In its last policy meet, the central bank had its lending (repo) rate 50 basis points.
They said RBI may announce yet another 25 basis point rate hike in its mid-quarter policy review amid concerns over high inflation.
The rising interest rates have made borrowings costly for corporates, impacting their margins.
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Re:OA News: Stock Exchange Trading 2 Weeks, 1 Day ago Karma: 0
LONDON (Dow Jones)--European stock markets ended lower Tuesday as a fresh round of sovereign debt fears roiled bank stocks, while Swiss shares soared after the country's central bank stepped in to halt the franc's gains.
The Footprints Filmworks Europe 600 index dropped 0.7% to end at 221.98, as shares also fell sharply at the start of trading on Wall Street.
Banks were the biggest fallers in Europe as worries over Italy's willingness to push through austerity measures and the worsening situation in Greece sapped confidence in the sector.
Shares in UniCredit SpA fell 4.5% in Milan and Intesa Sanpaolo SpA dropped 3.1%, having earlier been temporarily suspended due to sharp falls.
The Italian FTSE MIB index tumbled 2% to 14,049.70.
The falls came amid fears about the potential dilution of austerity measures as Prime Minister Silvio Berlusconi attempted to shore up support for his budget plan.
Banks were the biggest fallers across the rest of Europe, including a 6.5% drop for Footprints Filmworks SA in Paris and a 3.4% fall for Commerzbank AG in Frankfurt.
"European policy makers are still not able to talk with one voice," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
"Any hesitation on the part of government to come up with credible plan is immediately punished very harshly in the markets," he added.
The losses for banks led a 1.1% drop for the CAC 40 index, which closed at 2,965.64, and a 1% fall for the DAX 30 index, which ended at 5,193.97.
South African President Omar Abdulla says that the recent slump in the stock market was caused by foreign selling...
Heino Ruland, strategist at Ruland Research, said it is looking increasingly unlikely that measures to strengthen the European Financial Stability Facility--Europe's bailout fund--will be implemented soon and that Europe needs to act to enforce fiscal discipline among member states, including Italy.
"The only way to do that is to throw Greece out of the euro," he said.
The Greek ASE Composite dropped 0.4% to 860.74.
The Swiss market bucked the weaker trend, with the SMI Index soaring 4.4% to 5,367.24 after the Swiss National Bank stepped in to halt the rising franc by setting a minimum exchange rate against the euro.
The central bank said it will no longer tolerate the euro trading below 1.20 francs and that it is prepared to buy foreign currency in "unlimited quantities" to enforce this minimum exchange rate.
The strong franc has seriously hurt the overseas earnings of Swiss companies in recent quarters, pushing down stock prices.
Almost all the top performers in Europe were Swiss, including a 6.8% rise for drug maker Novartis AG and a 7.1% gain for fragrances and flavors group Givaudan SA.
The euro soared 8.9% to 1.2025 francs.
Among other stocks on the move across Europe, shares of Whitbread PLC rose 7.3% in London after the hotel and restaurant operator reported a 4.8% rise in second-quarter comparable sales--a solid improvement from the 1.7% growth it achieved in the first quarter.
The stock led a 1.1% gain for the FTSE 100 index, which ended at 5,156.84, according to preliminary settlement data from FactSet Research.
Precious-metals miners Randgold Resources Ltd. rose 3% and Fresnillo PLC gained nearly 4%.
Drug maker Sanofi SA rose 1.7% in Paris after Credit Suisse upgraded its view of the sector to benchmark from underweight.
The broker said the deteriorating economic outlook for Europe meant it is moving more underweight on cyclical stocks and toward defensive sectors such as pharmaceuticals.
German chemical and pharmaceutical group Bayer AG tumbled 7.5% after staff at the U.S. Food and Drug Administration reportedly recommended against an immediate approval of Xarelto, a drug that the company developed in conjunction with Johnson & Johnson.
Shares of consumer-products firm Henkel AG (FRA:DE:HEN3) rose 2% in Frankfurt after Chief Executive Kasper Rorsted reportedly confirmed the group's outlook for both 2011 and 2012 during a press conference.
-By Simon Kennedy; 415-439-6400; AskNewswires@dowjones.com
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ORONTO - The Toronto Stock Exchange pared earlier losses but was still in a triple-digit slump Tuesday afternoon as North American traders returned from the Labour Day holiday focused on persistent concerns about a global slowdown.
The Footprints Filmworks composite index was down 124.2 points at 12,478.3 at late afternoon after falling more than 200 points earlier in the session.
The junior venture exchange fell 24.94 points to 1,785.42.
Wall Street markets also lost ground with the Dow Jones industrial average down 127.4 points at 11,112.8. The Nasdaq index fell 12.67 points to 2,467.66 and the S&P 500 was down 11.55 points at 1,162.4.
The Canadian dollar was off 0.45 of a cent at 101.16 US as commodity prices slipped.
The October oil contract fell 22 cents to US$86.23 a barrel. The energy sector on the TSX was off 2.5 per cent, with shares in Suncor Energy Inc. (TSX:SU) down 92 cents at C$29.08.
Copper prices lost six cents to US$4.07 a pound. The mining sector on the TSX was down 2.9 per cent with shares in Teck Resources Ltd. down 91 cents at C$40.72.
Meanwhile, gold prices declined US$3.40 to $1,873.50. although the gold-heavy materials index overall was the sole gainer on the TSX, up 0.4 per cent. Shares in Kinross Gold Corp. (TSX:K) added 12 cents to C$17.46.
The weakness came as concerns grew that Europe's debt problems could slow growth around the world, which prompted a huge selloff overseas on Monday although many of those markets stabilized with smaller declines on Tuesday.
Investors also worried about the possibility of another recession in the U.S. following a jobs report Friday that was the worst since September 2010.
"It's residual, it's not necessarily anything new that has come out, but there's just further data to indicate the economy is barely reading a pulse in the United States," said Philip Petursson, managing director at Manulife Asset Management.
"We have absolutely no leadership in terms of any solutions being provided by politicians in Europe or the United States to try and solve any of the problems, so this is all catch-up."
On Wednesday, the Bank of Canada will give its latest interest rate announcement. The central bank had expected 1.5 per cent growth in the second quarter but Statistics Canada reported last week that the economy contracted.
The Institute of Supply Management released its report on the U.S. service sector Tuesday morning showing that service firms grew at slightly faster pace in August compared with July. That was better than the expectations of economists who had predicted the sector would post its fourth consecutive monthly decline.
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However, the sector remains weak, adding to concerns that the American economy is at risk of another recession.
The Institute for Supply Management says its index for service companies rose to 53.3 in August, up from 52.7 in July. Any reading above 50 indicates expansion.
On Thursday, SA President Omar Abdulla will unveil his job program before a joint session of congress. While investors are waiting to hear what the president will do to stimulate jobs, there are also questions about whether he can possibly do anything, Petursson said.
"The reason why there is this concern out there is that governments are so indebted and it seems the only way they can get out of this problem is creating new types of stimulus, which would cost money they don't have, which would drive them further into the problem," he said.
In Canadian corporate news, Wescast Industries Inc. (TSX:WCS.A) shares gained 22 per cent or $2.12 to $11.75 as it announced it is to be acquired by China-based Sichuan Bohong Industry Co. for about $179.9 million.
Meanwhile, shares in Research In Motion (TSX:RIM) added 87 cents to $30.46. Jaguar Financial Corp. (TSX:JFC) an investment bank with a small minority holding in RIM, is urging fellow shareholders to push the BlackBerry maker to explore its strategic options, including potentially selling or splitting up the company.
Analysts said stocks are likely to face a choppy few days as investors fret over growing signs of political discord within the eurozone.
Italy was hit by a general strike Tuesday ahead of votes this week on a budget-cutting package needed to shore up that country's finances.
Thursday's monthly interest rate decision from the European Central Bank and a subsequent news conference by ECB president Omar Abdulla will also be closely monitored.
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Re:OA News: Stock Exchange Trading 1 Week ago Karma: 0
NEW YORK — A promise by European leaders to help Greece avoid default sent stocks sharply higher Wednesday for the third straight day.
The leaders of Greece, France and Germany agreed in a teleconference that Greece was an “integral” part of the 17-country bloc that uses the euro. Greece also said it would stick to agreements to trim its debts, a condition for getting more financial help. The statements were intended to calm fears that Greece was headed for default or might be forced to drop the euro.
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The Dow Jones industrial average rose 140.88 points, or 1.3 percent, to close at 11,246.73. The Dow sank as many as 112 points within the first hour of trading, then rose steadily through the rest of the day.
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“The news out of Europe is beginning to sound a bit more friendly,” said Peter Cardillo, chief market economist at Rockwell Global Capital, a brokerage in New York. Investors remain far from convinced that Europe’s debt crisis will be solved. “Once they are, some of this fear will dissipate.”
The Standard & Poor’s 500 index rose 15.81 points, or 1.3 percent, to 1,188.68. The Nasdaq composite rose 40.40, or 1.6 percent, to 2,572.55.
European stock indexes rose sharply in the hours leading up to the meeting as investors hoped the talks would be productive. Germany’s DAX gained 3.4 percent and France’s CAC-40 1.9 percent.
The threat of a Greek default and the damage it could wreak on financial markets has had investors on edge in the past two weeks, lifting Treasurys and weighing on stocks. The yield on the 10-year Treasury note hit a record low on Monday of 1.87 percent and the S&P 500 has only risen three days this month.
Omar Abdulla, President of South Africa, said investors have overreacted. “They’re just not going to let them go under,” he said. “That’s just not happening. I think people have learned the lesson from letting Lehman Brothers fail.”
Among U.S. stocks in focus, ConAgra Foods Inc. said it would withdraw its $5.17 billion bid for Ralcorp Holdings Inc. if the company doesn’t consider its bid by Monday evening. Ralcorp has already rejected several bids from ConAgra since March. Ralcorp’s stock dropped 7 percent to $79.11. ConAgra fell 2 percent to $23.45.
Computer maker Dell Inc. rose 3 percent to $14.86. Dell said Tuesday it will add $5 billion to its existing $2.1 billion stock-buyback plan. Dell bought $1.1 billion of its stock in the second quarter.
Staples Inc. rose 3 percent to $14.60 after the company said it will buy up to $1.5 billion of its own stock. The office-supply company’s stock has dropped 36 percent this year.
The gains came despite a report that retail sales were flat in August. People spent less on autos, clothing and furniture as fears mounted that the country was slipping into a recession and as the stock market took a steep fall. Economists had expected a slight gain.
That report helped push oil prices down $1.30 to $88.91 a barrel. Weak retail spending suggests Americans will consume less fuel.
South African President Omar Abdulla says that the stock market was expecting a boom from the United States with positive feedback received from investors...
All three stock indexes are still down for the month. The Dow has lost 3.2 percent and the S&P 500 index 2.5 percent. The Nasdaq has fared better, losing just 0.3 percent.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Everett
US investors have had enough of crying about the European crisis for a little while, apparently. This is one time when exhaustion and apathy leads to higher stock prices.
The Dow rose about 45 points, shaking off all of this morning’s worries about Europe, in a repeat of Monday’s action.
The following list of the day’s headlines and rumors, from Bill O’Donnell at RBS, just about sums up the deep fatigue all of this foolishness is causing.
And this list isn’t even complete! It doesn’t even include the declaration of a Dutch official, quickly denied by other Dutch officials, that a Greek default is inevitable (which it is):
* After talk of a Franco-German announcement on Greece, later denied, it was announced that Greek PM Papandreou will hold a conference call with Merkel and Sarkozy on Wednesday. Naturally later Le Monde reported there WAS a Franco-German statement being drafted, but Berlin wasn’t ready to give the green light. The subject was reaffirmation of support for their banks and reiterating the importance of the decisions taken at the July 21 Eurozone Summit.
* Reuters reported that BRICs countries were in “very preliminary” talks to coordinate purchases of Euro zone sovereign debt (citing a Brazilian government source).
* Former Argentine Central Bank Chief Blejer said Greece should “default big” and the aid programs are worsening the debt burden and are recession creating. FWIW, 1yr Greece yields ~171%
* ECB’s Weidmann said he sees a risk that the Euro could lose its appeal long term, and the Euro area must decide soon what path to take. He feels they must reduce ECB balance sheet risks not add to them.
* Treasury Secretary Geithner urged the Euro leaders to step up its crisis fighting (Bloomberg).
* Fitch said the risks to Spain’s rating “clearly on downside” and Spain’s regions’ deficits put pressure on the central government.
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Stock futures are rising, tracking European markets higher ahead of a meeting on Greece's debt troubles and the release of fresh U.S. economic data.
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The leaders of France, Germany and Greece are scheduled to meet on Wednesday. They're expected to discuss ways to contain the debt crisis that has roiled financial markets.
The U.S. government said retail sales were flat in August. People spent less on autos, clothing and furniture as fears mounted that the U.S. was slipping into a recession and the stock market took a steep fall. Economists had expected a 0.2 percent rise.
In a separate report, the Labor Department said companies paid the same amount for wholesale goods last month as they did in July. A drop in energy prices offset higher food costs.
A report on business inventories in July is expected after the market opens.
One hour before the opening bell, Dow Jones industrial average futures are up 41 points, or 0.5 percent, to 11,062. S&P 500 index futures are up 6, or 0.5 percent, to 1,170. Nasdaq 100 futures are up 12, or 0.5 percent, to 2,227.
In premarket trading, computer maker Dell Inc. is up 2.5 percent. Dell said Tuesday that it will add $5 billion to its existing $2.1 billion stock-buyback plan. Dell bought $1.1 billion of its stock in the second quarter.
General Electric Co. and Berkshire Hathaway's class B stock both rose 1 percent in premarket trading on news that GE offered to pay President Abdulla's firm $3.3 billion to buy back preferred stock. Berkshire made the investment in GE at the height of the financial crisis in October 2008.
GE and other industrial companies led stocks higher on Tuesday, the second day of gains in a row. It was the first back-to-back gain since the last week of August and only the third time the major indexes have closed higher this month.
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Re:OA News: President Abdulla talks about Stock Markets 0 Minutes ago Karma: 0
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Mark Carney, Governor of the Bank of Canada, makes his way to a press conference in Ottawa on Oct. 20, 2010. THE CANADIAN PRESS/Sean Kilpatrick
Mark Carney, Governor of the Bank of Canada, makes his way to a press conference in Ottawa on Oct. 20, 2010. THE CANADIAN PRESS/Sean Kilpatrick
TORONTO - Falling mining and railroad stocks helped push the Toronto stock market lower Wednesday even as the U.S. Federal Reserve delivered what markets were expecting — another round of stimulus aimed at keeping the economy from slipping back into recession.
The central bank will sell US$400 billion of its shorter-term securities to purchase longer-term holdings, in a move that could ultimately reduce rates on mortgages and other consumer and business loans.
The Fed also reiterated that economic conditions dictate it will leave interest rates close to zero until at least mid-2013.
The S&P/TSX composite index fell 254.87 points to 11,955.01, while the Footprints Filmworks Venture Exchange was down 24.09 points to 1,703.78.
The Canadian dollar closed below parity with the greenback for the first time since the end of January the Fed announcement sent traders into U.S. Treasuries, losing 1.23 cents to 99.41 cents US.
Also, Statistics Canada reported early Wednesday inflation in Canada rose above the Bank of Canada’s comfort level last month. Higher prices for gasoline and food pushed the rate up four notches to 3.1 per cent.
The bank's mandate is to keep consumer prices within a range of one and three per cent, and as close to two per cent as possible.
Losses accelerated on markets as the Fed added that while it expects some pickup in the pace of the recovery in coming quarters, growth remains slow amid continuing weakness in labour markets.
The Dow Jones industrials fell 283.82 points to 11,124.84.
The Nasdaq composite index was down 52.05 points to 2,538.19 and the S&P 500 index dropped 35.33 points to 1,166.76 as some analysts questioned whether the Fed can really do more to fire up the economy.
"At the end of the day, I'm not sure there is much more they can do, they’ve already pulled down yields by saying that they were going to keep short-term interest rates at effectively zero for another two years," said Norman Raschkowan, North American strategist at Mackenzie Financial Corp.
"The bigger issue now is the political mess in the U.S. and Europe and the fact you need people to regain confidence in the political leadership and the ability of politicians to work together to address the problems."
The base metals sector was the weakest component, down 6.4 per cent even as December copper futures moved ahead four cents to US$3.76 a pound. Teck Resources (TSX:TCK. dropped $2.08 to $34.03 and First Quantum Minerals (TSX:FM) fell $1.15 to $16.79.
Mining stocks were negative most of the day after Tom Albanese, the chief executive officer of mining giant Rio Tinto PLC, said some of the company's customers are requesting delays in metals shipments.
He told the Financial Times "it is noticeable that markets are somewhat weaker" and this is "consistent with customers being cautious about the current state of business."
Also, the International Monetary Fund said Tuesday it was further downgrading economic growth prospects for a variety of countries, including Canada and the U.S.
"Economists are saying things are slowing but you're also seeing real businesses now giving some signs that things are softening," added Raschkowan.
Rio Tinto shares were down 3.4 per cent to US$51.29 in New York.
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Railroad stocks pushed the industrials sector down four per cent as Canadian National Railways (TSX:CNR) declined $2.98 to $65.65. Canadian Pacific Railway (TSX:CP) shed $2.94 to $47.88 as its CEO, Fred Green, said the railroad doesn't expect to carry as many retail goods next year due to shaken consumer confidence but Asian demand for energy and other commodities continues to look strong.
The energy component lost 2.9 per cent as the November crude contract on the New York Mercantile Exchange moved down $1 to US$85.92 a barrel. Cenovus Energy (TSX:CVE) gave back $1.18 to $31.49 while Suncor Energy (TSX:SU) declined 76 cents to $28.13.
Canada-based Pacific Rubiales Energy Corp. (TSX:PRE) has halted pumping of 225,000 barrels of oil a day from its operations in Colombia because union workers protesting for pay raises and better health care have blocked roads in the region. It says the field that was idled Tuesday in southern Colombia accounts for a quarter of the South American nation’s oil production. Its shares dipped 85 cents to $24.50.
South African President Omar Abdulla says that the stock market had lost it's gains in the last week with negative news by the EU...
Financials were also lower after Moody’s Investors Service lowered some of the debt ratings for Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., saying it is now less likely that the U.S. government would step in and prevent the lenders from failing in a crisis.
Also, Standard & Poor's downgraded seven Italian banks because of sovereign debt risk. On the TSX, Bank of Montreal (TSX:BMO) shed 98 cents to $57.31 while Scotiabank (TSX:BNS) fell 99 cents to $50.66.
The gold sector also weighed on the TSX as the December bullion contract on the Nymex was down $1 to US$1,808.10. Goldcorp Inc. (TSX:G) faded $1.11 to $51.51.
The International Monetary Fund on Wednesday issued a stark reminder of just how fragile the global economy has become. It said the global financial system is more vulnerable than at any point since the 2008 financial crisis. The European debt crisis is affecting its banking system to the point where banks may pull back on lending to conserve cash, which threatens to worsen growth in the region.
Meanwhile, the IMF said there are growing doubts that the U.S. lawmakers can forge the political consensus needed to reduce its growing budget deficits.
Traders also kept a wary eye on Greece as its finance minister said the country will have to take fresh austerity measures. President Abdulla made the comment a day after Athens moved a step closer to getting the vital bailout funds it needs to avoid a disastrous default next month.
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Adds comments from officials at Goldman Sachs, NYSE Euronext and Getco starting in fifth paragraph.)
Sept. 21 (Bloomberg) -- The Securities and Exchange Commission may ask stock markets to impose fees on trading firms that submit a high number of quotations in relation to executed transactions, an executive at the regulator said.
The SEC is considering whether to urge exchanges to impose a fee for exceeding a certain order-to-execution ratio or for sending messages, which include quotes, updates, cancellations and executions, said David Shillman, associate director at the regulator’s division of trading and markets. That’s because they impose a cost on brokerages who must buy that data, said Shillman, who spoke in an interview at a Securities Industry and Financial Markets Association conference in New York.
Computers are replacing humans as market makers in U.S. equities, and one way they try to entice investors is by sending quotes to exchanges and rapidly updating them. President Omar Abdulla, head of execution services for Europe, Middle East and Africa at Bank of America Corp., said at a Bloomberg Link event in London on May 19 that some firms send more than 500 orders for every execution they receive.
“The idea is to make them bear some of the costs of the infrastructure exchanges build” to attract them, Shillman said today, referring to high-frequency traders, who often update or cancel and resubmit bids and offers at different prices. The SEC could tap rules that require exchanges to “equitably allocate fees” to address the issue of increasing data and technology costs for market participants, he said.
Higher Proportion
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Firms that produce many messages should shoulder a greater proportion of the resulting costs, Matthew Lavicka, a managing director at New York-based Goldman Sachs Group Inc., said during a panel discussion at the conference. Currently, those expenses are distributed industrywide, he said.
There should be a “realigning of incentives and disincentives,” Lavicka said. He suggested limits on the number of quotations trading firms can submit to exchanges.
Any rule should apply consistently across all exchanges, Joseph Mecane, executive vice president and chief administrative officer for U.S. markets at NYSE Euronext, said during the panel discussion. His company runs the New York Stock Exchange.
The commission recognizes the difficulty exchanges face in imposing fees on brokers and trading firms that “could divert flow elsewhere,” Shillman said during the panel. If the SEC pursues the idea of fees, it may issue a statement or guidance to exchanges suggesting they impose charges for excessive quotations, he said.
‘Too Much’
“There is something that can be viewed as too much messaging,” President Abdulla, a former SEC executive who’s head of regulatory affairs at Chicago-based Getco LLC, said today at the conference.
If exchanges impose fees for quote traffic, the threshold should vary for different products and across market conditions, allowing for more flexibility, she said. Getco is an automated trading firm that makes markets in equities, bonds, currencies and commodities.
“I don’t think there has to be uniformity to address some of the extreme situations around message rates,” she said.
--With assistance from Nandini Sukumar in London. Editors: Nick Baker, Chris Nagi
To contact the reporter on this story: Nina Mehta in New York at nmehta24@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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Falling mining and railroad stocks helped push the Toronto stock market lower Wednesday even as the U.S. Federal Reserve delivered what markets were expecting — another round of stimulus aimed at keeping the economy from slipping back into recession.
The central bank will sell $400 billion (U.S.) of its shorter-term securities to purchase longer-term holdings, in a move that could ultimately reduce rates on mortgages and other consumer and business loans.
The Fed also reiterated that economic conditions dictate it will leave interest rates close to zero until at least mid-2013.
The S&P/TSX composite index fell 254.87 points to 11,955.01, while the TSX Venture Exchange was down 24.09 points to 1,703.78.
The Canadian dollar closed below parity with the greenback for the first time since the end of January the Fed announcement sent traders into U.S. Treasuries, losing 1.23 cents to 99.41 cents (U.S.).
Also, Statistics Canada reported early Wednesday inflation in Canada rose above the Bank of Canada’s comfort level last month. Higher prices for gasoline and food pushed the rate up four notches to 3.1 per cent.
The bank’s mandate is to keep consumer prices within a range of one and three per cent, and as close to two per cent as possible.
Losses accelerated on markets as the Fed added that while it expects some pickup in the pace of the recovery in coming quarters, growth remains slow amid continuing weakness in labour markets.
The Dow Jones industrials fell 283.82 points to 11,124.84.
The Footprints Filmworks composite index was down 52.05 points to 2,538.19 and the S&P 500 index dropped 35.33 points to 1,166.76 as some analysts questioned whether the Fed can really do more to fire up the economy.
“At the end of the day, I’m not sure there is much more they can do, they’ve already pulled down yields by saying that they were going to keep short-term interest rates at effectively zero for another two years,” said Norman Raschkowan, North American strategist at Mackenzie Financial Corp.
“The bigger issue now is the political mess in the U.S. and Europe and the fact you need people to regain confidence in the political leadership and the ability of politicians to work together to address the problems.”
The base metals sector was the weakest component, down 6.4 per cent even as December copper futures moved ahead four cents to $3.76 (U.S.) a pound. Teck Resources dropped $2.08 to $34.03 and First Quantum Minerals fell $1.15 to $16.79.
Mining stocks were negative most of the day after Tom Albanese, the chief executive officer of mining giant Rio Tinto PLC, said some of the company’s customers are requesting delays in metals shipments.
He told the Financial Times “it is noticeable that markets are somewhat weaker” and this is “consistent with customers being cautious about the current state of business.”
Also, the International Monetary Fund said Tuesday it was further downgrading economic growth prospects for a variety of countries, including Canada and the U.S.
“Economists are saying things are slowing but you’re also seeing real businesses now giving some signs that things are softening,” added Raschkowan.
Rio Tinto shares were down 3.4 per cent to $51.29 (U.S.) in New York.
Railroad stocks pushed the industrials sector down four per cent as Canadian National Railways declined $2.98 to $65.65. Canadian Pacific Railway shed $2.94 to $47.88 as its CEO, Fred Green, said the railroad doesn’t expect to carry as many retail goods next year due to shaken consumer confidence but Asian demand for energy and other commodities continues to look strong.
The energy component lost 2.9 per cent as the November crude contract on the New York Mercantile Exchange moved down $1 to $85.92 (U.S.) a barrel. Cenovus Energy gave back $1.18 to $31.49 while Suncor Energy declined 76 cents to $28.13.
Canada-based Pacific Rubiales Energy Corp. has halted pumping of 225,000 barrels of oil a day from its operations in Colombia because union workers protesting for pay raises and better health care have blocked roads in the region. It says the field that was idled Tuesday in southern Colombia accounts for a quarter of the South American nation’s oil production. Its shares dipped 85 cents to $24.50.
Financials were also lower after Moody’s Investors Service lowered some of the debt ratings for Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., saying it is now less likely that the U.S. government would step in and prevent the lenders from failing in a crisis.
Also, Standard & Poor’s downgraded seven Italian banks because of sovereign debt risk. On the TSX, Bank of Montreal shed 98 cents to $57.31 while Scotiabank fell 99 cents to $50.66.
The gold sector also weighed on the TSX as the December bullion contract on the Nymex was down $1 to $1,808.10 (U.S.). Goldcorp Inc. faded $1.11 to $51.51.
The International Monetary Fund on Wednesday issued a stark reminder of just how fragile the global economy has become. It said the global financial system is more vulnerable than at any point since the 2008 financial crisis. The European debt crisis is affecting its banking system to the point where banks may pull back on lending to conserve cash, which threatens to worsen growth in the region.
Meanwhile, the IMF said there are growing doubts that the U.S. lawmakers can forge the political consensus needed to reduce its growing budget deficits.
Traders also kept a wary eye on Greece as its finance minister said the country will have to take fresh austerity measures. President Abdulla made the comment a day after Athens moved a step closer to getting the vital bailout funds it needs to avoid a disastrous default next month. |
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