[NEW YORK] Wall Street stocks finished little changed Wednesday following mixed corporate earnings and a second day of congressional testimony from Fed Chair Janet Yellen.

At the closing bell, the Dow Jones Industrial Average stood at 18.233.09, up 13.90 points (0.08 per cent), edging to a record for the second day in a row.

The broad-based S& P 500 slipped 1.78 (0.08 per cent) to 2,113.70, while the tech-rich Nasdaq Composite Index shed 0.98 (0.02 per cent) at 4,967.14.

TJX, which owns Marshall' s, TJ Maxx and other discount apparel and home-goods chains, rose 3.3 per cent after announcing it would raise its dividend and buy back more shares following strong earnings.

But technology giant Hewlett-Packard sank 9.9 per cent after warning of a big drag from the strong dollar as it reported lower earnings.

Markets shrugged off Ms Yellen' s second day of testimony, to a House of Representatives panel, after her remarks Tuesday had helped lift the Dow and the S& P 500 to record closes.

" Fed Chair Janet Yellen sang the same song, but second verse, as she testified to the House today and reiterated rate increases are not imminent," said a note from Wells Fargo Advisors.

 

 

Wealthy Asians Seek Refuge in U.S. Dollar During Currency Turmoil

By Netty Idayu Ismail - 29 Jan 2015 7:06:35 am

[NEW YORK] US stocks fell, sending the Dow Jones Industrial Average to its biggest two-day loss in a year, as energy shares plunged and concern grew about international risks to the American economy and weakness in multinational earnings.

Energy companies slumped 3.9 per cent as a group after oil retreated. Apple Inc climbed 5.7 per cent after reporting a record US$18 billion in quarterly profit, one of the biggest in corporate history. Boeing Co advanced 5.4 per cent as it posted a quarterly profit that beat analysts' estimates.

The Standard & Poor' s 500 Index fell 1.4 per cent to 2,002.16 at 4 pm in New York. The Dow Jones Industrial Average lost 195.84 points, or 1.1 per cent, to 17,191.37. The gauge fell 2.8 per cent over two days, the most since February 2014. The Nasdaq 100 Index dropped 0.6 per cent, erasing an earlier rally of 1.7 per cent. The Chicago Board Options Exchange Volatility Index, known as the VIX, added 19 per cent to 20.44, its biggest jump of the year.

" People smell no growth," Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in an interview. " Currency problems are affecting revenues for multinationals. Greece is becoming a much bigger worry for the markets right now," he said. " Think about where the market would be today without Apple and Boeing." US stocks turned lower after the Fed boosted its assessment of the economy and downplayed low inflation readings while repeating a pledge to remain " patient" on raising interest rates. Losses accelerated in the final hour, pushing declines in the Dow and S& P 500 beyond 1 per cent and wiping out gains in the Nasdaq.

Fed officials are confronting divergent economic forces as they weigh the timing of the first interest-rate increase since 2006. Surprisingly strong job gains argue for tightening sooner, while inflation held down by a plunge in oil prices and a cooling global economy provides grounds for delay.

The Fed acknowledge global risks, saying that it will take into account readings on " international developments" as it decides how long to keep rates low.

" The Fed continued to emphasise that any rate hike decisions will be very data-dependent, which has been the norm for quite some time," Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer' s Investment Research Inc, said in a phone interview. " People are looking closely at earnings, which has been the story of the volatility in the past week or two. Oil and the strong US dollar are also creating a drag on large multinational companies." Greek Government U.S. futures pared early gains amid concerns over Greece' s new government. New Prime Minister Alexis Tsipras named a cabinet yesterday that includes a foreign minister who raised questions over European Union sanctions against Russia and a finance minister who has called Greece' s bailout a trap, while new ministers said they will cease the sale of some state assets and increase the minimum wage.

The S& P 500 has more than tripled from its March 2009 low, buoyed by three rounds of stimulus from the Fed. The index is down 4.2 per cent from an all-time high reached in December.

As the US has ended its bond-buying program, the European Central Bank is expanding its stimulus plan. The ECB announced last week it would spend 60 billion euros (US$68 billion) a month starting in March on purchases of debt to ward off the threat of deflation in the euro area.

Equities opened higher on Wednesday as Apple and Boeing rallied amid quarterly results, a day after benchmark indexes tumbled on concern that a stronger dollar is eroding profits at large companies.

Earnings Season While the dollar' s climb is reducing profits at US companies from Procter & Gamble Co to Pfizer Inc and Microsoft Corp, more than 77 percent of Standard & Poor' s 500 Index members have still beaten analysts' estimates so far this earnings season, according to data compiled by Bloomberg.

All 10 main industries in the S& P 500 fell.

Energy shares lost 3.9 per cent, the most in three weeks, after oil tumbled as US inventories rose to a three-decade high. Exxon Mobil Corp, Chevron Corp and Schlumberger Ltd fell at least 3.3 per cent.

Yahoo! Inc fell 3.2 per cent, erasing an earlier rally of 4.9 per cent. The company said Tuesday it will spin off its remaining stake in Alibaba Group Holding Ltd. The tax-free spinoff will place Yahoo' s holding in the Chinese e-commerce company into a new firm called SpinCo.

Apple jumped 5.7 per cent. Net income surged 38 per cent, fueled by sales of larger-screened iPhones and refreshed Mac computers that Apple had unveiled in September, part of a barrage of new products from Chief Executive Officer Tim Cook as he sought to revitalize the company' s revenue.

Boeing gained 5.4 per cent, the most since 2011, as it beat analysts' estimates and predicted it would make good in 2015 in converting a record jetliner-order backlog into cash. Investors have been waiting to see Boeing start generating more cash from its plane orders and stem losses on the 787 Dreamliner.

 

[SINGAPORE] Singapore Exchange Ltd' s chief executive said on Wednesday he is looking to emulate the much-heralded Stock Connect link between Hong Kong and Shanghai by formally linking together Southeast Asian bourses.

With a plan already in the works to form a stock trading link with Taiwan later this year, Magnus Bocker told Reuters that establishing direct connections between exchanges has replaced mergers and acquisitions as the industry' s main growth strategy, particularly in Asia.

He wants a fledgling link between stock broking houses in Singapore, Malaysia and Thailand, known as the Association of Southeast Asian Nations (Asean) Trading Link, to evolve into a formal connection between the region' s exchanges.

" I' m optimistic that out of that Asean Trading Link, with what' s going on in linking up markets, that hopefully within a couple of years we can link Asean closer together between the exchanges, the clearing houses," he said.

The November launch of the landmark Stock Connect trading platform between Hong Kong and Shanghai has, despite some technical problems, been hailed as a major step forward in the opening up of China' s capital markets.

The launch has spurred other exchanges including Taiwan and Shenzhen to look at such connections, hoping to make cross-border share trading easier and improve market liquidity.

Developing such a link in Southeast Asia will be tough though. Asean is notorious for its slow progress on joint initiatives, and the current trading link between broking houses that was established in 2012 has so far seen low volumes.

" We are not there yet but with the other links coming, I think it will enable us to do it in an Asean context," Mr Bocker said.

Joining Stock Connect or forming a strong separate Asean trading link would provide an impetus to Singapore' s beleaguered securities market.

While Singapore is the number one venue in Asia for foreign exchange and has seen strong growth in derivatives trading, the average value of shares traded on its exchange each day is now less than that of Thailand' s and trails far behind Hong Kong and Tokyo.

The bourse has launched a series of initiatives over the past year to boost liquidity such as providing incentives for brokers to act as market makers and cutting the minimum number of shares that need to be purchased in a trade from 1000 units to 100.

Mr Bocker says while it is still early days, initial signs are that those moves are now starting to boost volumes, which were hit by a penny stock scandal in late 2013.

" The first three weeks of this year are coming up much stronger than the same three weeks a year ago," he said.

Speculation mounted late last year that Mr Bocker, 53, may not have his contract renewed when it expires this June, after two technical glitches in less than a month caused stock trading to be halted.

He says his contract renewal is a matter for SGX' s board.

" I am enjoying what I am doing. There is no doubt about it."

Investors say while Mr Bocker is taking the right steps, until it can attract bigger companies to list on its market, it is likely to remain in the shadow of Hong Kong Exchanges and Clearing.

" It doesn' t have the big brother hinterland that Hong Kong has. So that' s a structural issue for them," said David Smith, head of corporate governance at Aberdeen Asset Management Asia, which owns shares in SGX.

Unlike Hong Kong, Singapore has seen few large IPOs in the past two years while there has also been a spate of delistings among its bigger companies. Last week, conglomerate Keppel Corp offered to take private its property unit in a US$2.7 billion deal.

Mr Bocker says while the exchange struggles compared with Hong Kong to attract large Chinese state-owned companies on to its market, they still have a strong pipeline of companies from India and other Asian markets looking to list.

" The rumour of our death is a little bit exaggerated, I would say," he said.