July 12, 2013
Stock Markets Fluctuate, but Emerging Markets Continue to Rally
The stock markets today enjoyed another day of “fresh highs,” coming seven weeks after the averages began falling “with worries whether the Fed would end its policy of bond buying stimulus and ultra-low interest rates,” according to ABC News’ Morning Business Memo by Richard Davies.
The highs didn’t sustain themselves throughout the day, however. Stocks began to fluctuate in spite of benchmark indexes closing at records yesterday, in response to Federal Reserve Bank of Philadelphia President Charles Plosser “urged a tapering of stimulus efforts in September and bank earnings topped estimates,” writes Bloomberg News.
One company whose stock values fell was the United Parcel Service, sinking 5.6 percent in the wake of cutting its forecast for earnings in 2013. At 12:17 pm today, the S&P 500 fell 02 percent in New York, and the Dow Jones Industrial Average dropped 0.1 percent today.
“The market is catching its breath after a big push to a record high,” Alan Gayle, senior strategist at RidgeWorth Capital Management, said by telephone from Atlanta. His firm oversees about $48 billion. “The market is encouraged by the earnings releases so far but UPS was disappointing. That’s a good GDP bellwether stock. When they give lowered guidance, investors will watch very carefully.”
In a similar vein, Rico Gomez, who helps manage $2.8 billion at Rizal Commercial Banking Corp. (RCB) said that “Bernanke’s comment helped settle a market that turned finicky from the previous perception that stimulus will be abruptly stopped…A slowdown in China’s growth will affect demand not only for commodities, which are experiencing a decline in prices.”
One sector enjoying new gains was emerging markets. These stocks rose for yet another day “amid speculation global central banks will keep economic stimulus and after Infosys Ltd’s better-than-estimated sales forecast lifted technology companies,” according to Bloomberg News.
Infosys jumped the most in six months, the MSCI Emerging Markets Index rose 0.2 percent (making its weekly gain 3 percent), and the Borsa Instanbul Stock Exchange National 100 Index rallied. Additionally, eight out of 10 groups in the MSCI Emerging Markets Index rose today as health-care, industrial and energy companies had the greatest gains. Brazil’s Ibovespa, however, dropped for the first time in three days.
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