US: Wall St climbs, S&P 500 posts best week since July

SEP 12, 20155:36 AM

[NEW YORK] US stocks rose on Friday and the S&P 500 posted its biggest weekly gain since July as investors weighed whether the Federal Reserve will raise interest rates next week.

Energy shares dropped, however, after Goldman Sachs cut its oil price forecast through next year.

Eight of the 10 S&P 500 sectors closed higher, led by gains in utilities, which tend to rise as bond yields fall. The index ended up 0.8 per cent, while 10-year US Treasury note yields dipped.

Investors are awaiting next week's Fed monetary policy meeting and news on whether it will raise benchmark US rates for the first time in almost a decade. "It's really Fed watch. That's what traders are waiting for," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York. "There's speculation the Fed might hold off, and if they do, I think we'll see stocks rally. But to us, it's not a question of if the Fed raises rates but when. It's going to happen." The Dow Jones industrial average rose 102.69 points, or 0.63 per cent, to 16,433.09, the S&P 500 gained 8.76 points, or 0.45 per cent, to 1,961.05 and the Nasdaq Composite added 26.09 points, or 0.54 per cent, to 4,822.34.

For the week, the S&P was up 2.1 per cent and the Nasdaq rose 3.0 per cent, registering their biggest weekly percentage gains since mid-July. The Dow was up 2.1 per cent for the week, its best weekly percentage increase since late March.

Stocks have been volatile since China devalued its currency in August amid concerns of sputtering growth in the world's second-largest economy. The S&P 500 has had moves of at least 1 per cent in 11 sessions since Aug 20.

The Fed has said it will raise rates when it sees a sustained economic recovery, especially in the job market.

The day's data signaled moderate economic growth and tame inflation. US consumer sentiment dropped to its lowest in a year in early September, while producer prices for August were flat.

Oil prices fell after the Goldman forecast, which cited oversupply and concerns over China's economy. Goldman said crude could fall as low as US$20 a barrel. ConocoPhillips, down 2.2 per cent at US$47.36, was the biggest drag on the S&P 500.

Gilead rose 2.2 per cent to US$109.63 after the company's US$10 billion debt offering this week fueled speculation it was planning a big acquisition.

On the down side, Zumiez fell 32.5 per cent to US$14.63 after the sports apparel and accessories maker forecast third-quarter sales and profit below analysts' estimates.

Volume was light. About 6.0 billion shares changed hands on US exchanges, compared with the 8.0 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Advancing issues outnumbered declining ones on the NYSE by 1,629 to 1,429, for a 1.14-to-1 ratio on the upside; on the Nasdaq, 1,565 issues rose and 1,216 fell for a 1.29-to-1 ratio favoring advancers.

The S&P 500 posted one new 52-week high and 10 new lows; the Nasdaq recorded 32 new highs and 87 new lows.

REUTERS

      

Crane collapse kills 87 at Mecca's Grand Mosque ahead of hajj

SEP 12, 20155:46 AM

[RIYADH] A massive construction crane crashed into Mecca's Grand Mosque in stormy weather Friday, killing at least 87 people and injuring 184, Saudi authorities said, less than a fortnight before the annual hajj pilgrimage.

The civil defence authority said on Twitter that emergency teams were sent to the scene after a "crane fell at the Grand Mosque," one of Islam's most revered sites.

That came about an hour after it tweeted that Mecca was "witnessing medium to heavy rains," and pictures circulating on social media showed lightning.

Ahmed bin Mohammad al-Mansoori, spokesman for the two holy mosques was quoted by the official Saudi Press Agency as saying part of a crane collapsed at 5:10 pm (1410 GMT) "as a result of strong winds and heavy rains." Abdel Aziz Naqoor, who said he works at the mosque, told AFP he saw the crane fall after being hit by the storm.

"If it weren't for Al-Tawaf bridge the injuries and deaths would have been worse," he said, referring to a covered walkway that surrounds the Kaaba and broke the crane's fall.

The Kaaba is a massive cube-shaped structure at the centre of the mosque towards which Muslims worldwide pray and which plays a major role in the hajj.

Pictures of the incident on Twitter showed bloodied bodies strewn across a courtyard where the top part of the crane, which appeared to have bent or snapped, had crashed into the several storey-high building.

A video on YouTube showed people screaming and rushing around right after a massive crash was heard and as fog engulfed the city.

The incident occurred as hundreds of thousands of Muslims gather from all over the world for the annual hajj pilgrimage expected to begin on September 21.

The Grand Mosque is usually at its most crowded on Fridays, the Muslim weekly day of prayer.

Many faithful would have been gathered there ahead of evening mahgrib prayers, which occurred about an hour after the tragedy.

The governor of Mecca region, Prince Khaled al-Faisal, has ordered an investigation into the incident and was heading to the mosque, the official #makkahregion page on Twitter said.

Online activists created a hashtag on Twitter urging Mecca residents to donate blood at hospitals in the area.

No details were immediately available on the nationalities of the victims.

But Iran's official IRNA news agency, quoting the head of the Hajj Organisation, said 15 Iranian pilgrims were among those injured.

Most of them were treated as outpatients, Saeid Ohadi said.

A massive project is currently underway to expand the area of the mosque by 400,000 square metres (4.3 million square feet), allowing it to accommodate up to 2.2 million people at once.

The mosque is surrounded by a number of cranes.

Though marred in the past by deadly incidents including floods, stampedes and fires, the hajj has become nearly incident-free in recent years because of multi-billion dollar projects.

These have included transport networks and other infrastructure to facilitate movement of the huge numbers of people who take part.

SPA said that almost 800,000 pilgrims had arrived bt Friday for the hajj, which all able-bodied Muslims are expected to perform if they have the means to do so.

Last year, just over two million people took part.

AFP

      

Oil slumps on Goldman call, stocks mixed before Fed meeting

Crude oil fell on Friday after Goldman Sachs slashed its price forecast through next year, while global equity markets traded mixed on worries over the economic outlook and whether the Federal Reserve will raise interest rates next week. 

PHOTO: REUTERS

SEP 12, 20155:56 AM

[NEW YORK] Crude oil fell on Friday after Goldman Sachs slashed its price forecast through next year, while global equity markets traded mixed on worries over the economic outlook and whether the Federal Reserve will raise interest rates next week.

A drop in US consumer sentiment in September to its lowest in a year initially weighed on Wall Street, as the University of Michigan's preliminary reading for the month slid to 85.7, compared with the final reading of 91.9 in August.

It was also much lower than the median forecast of 91.2 of economists polled by Reuters. "This is the first survey to reflect what people are feeling" about the economic slowdown in China and the US stock market's recent selloff, said Phil Orlando, chief equity strategist at Federated Investors in New York. "At least in the near-term it's going to create some dislocation." Stocks in Europe fell on the day but still recorded the biggest weekly rise since July. The pan-European FTSEurofirst 300 index closed down 1.0 per cent at 1,401.07, and MSCI's all-country world stock index traded near break-even, down 0.02 per cent.

Wall Street also rebounded in thin trade ahead of the Fed's policy-setting meeting next week. "The knee-jerk reaction on the Fed lift-off is negative," Mr Orlando said. "We think the Fed lift-off is a positive for the economy and stocks, because it means the Fed is rubber-stamping the fact they truly believe the economy is strong enough." The Dow Jones industrial average rose 42.03 points, or 0.26 per cent, to 16,372.43. The S&P 500 gained 0.82 points, or 0.04 per cent, to 1,953.11 and the Nasdaq Composite added 9.36 points, or 0.2 per cent, to 4,805.61.

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Goldman Sachs, Wall Street's most influential voice in oil trading, slashed its 2016 forecast for US crude prices to US$45 a barrel from US$57 previously, and Brent to US$49.50 down from US$62, citing oversupply and concerns over China's economy.

Goldman also said while not its base case, crude could fall further to near US$20 a barrel.

US crude futures' front-month contract settled down US$1.29 at US$44.63 a barrel. The front-month in Brent, the global benchmark for oil, slid 75 cents to settle at US$48.14.

US Treasury prices gained as stocks fell and as investors focused on whether the Fed will raise rates for the first time in almost a decade when its policy-makers meet next week. "It's all about whether the Fed indicates that they are going to do some kind of tightening," said Tom di Galoma, head of rates and credit trading at ED&F Man Capital Markets in New York.

Benchmark 10-year notes were last up 11/32 in price to yield 2.1830 percent.

German 10-year yields, the eurozone benchmark, were down 4 basis points at 0.66 per cent on growing doubts that the Fed would raise interest rates next week.

The dollar was little changed in thin, listless trading ahead of next week's Fed meeting.

The dollar index, a basket of currencies valued against the dollar, fell 0.28 per cent to 95.186.

REUTERS

      

EU states seek budget leeway to cope with migrants crisis

As they cope with the worst migration crisis in decades, European Union states want some flexibility from the European Commission when it reviews their draft budget plans - but the commission says the EU fiscal rules must be respected. 

PHOTO: AFP

SEP 12, 20155:52 AM

[LUXEMBOURG] As they cope with the worst migration crisis in decades, European Union states want some flexibility from the European Commission when it reviews their draft budget plans - but the commission says the EU fiscal rules must be respected.

Since the beginning of the year, about 500,000 migrants have reached the European Union, fleeing war and poverty in their home countries.

The economic impact of the influx should be taken into account when the European Commission reviews national budgets in the coming weeks, Luxembourg Finance Minister Pierre Gramegna said as EU finance ministers gathered on Friday in Luxembourg for a regular monthly meeting. "We have asked the Commission to make an economic and financial analysis of what the financial impact of the refugees crisis can be," Mr Gramegna told a news conference at the end of the meeting.

Luxembourg holds the six-month presidency of the EU and spoke on behalf of several EU countries who raised the issue during the meeting. "We will examine that in the framework of our rules because we must also stick to the commitments," EU Economics Commissioner Pierre Moscovici told reporters.

European Commission President Jean-Claude Juncker proposed on Wednesday a plan to relocate a total of 160,000 asylum seekers across EU countries. He estimated a cost to the EU of 780 million euros (S$1.24 billion) over two years. EU states are expected to contribute with national resources, too.

Mr Moscovici, who is in charge of supervising euro zone budgets, agreed to examine the economic impact of the crisis and may present his findings on Oct 5, the next meeting of euro zone ministers. Euro zone countries are due to submit their draft budgets to Brussels on Oct 15.

The European Commission has the authority to send back the draft budgets and push for changes, thanks to the new rules adopted after the euro zone's 2009-2014 debt crisis.

Mr Moscovici said that "several" countries asked for the economic analysis, which can lead to some leeway on the euro zone's strict budget rules. Beside Luxemburg, Austria, Italy and Ireland raised this issue.

The outcome of the analysis is far from clear. Some eurozone states, such as Germany, are likely to oppose too much flexibility for countries with high public debt and deficit.

REUTERS

    
 

Japan in urgent search for missing after deadly floods

Japanese authorities were on Friday grappling with the aftermath of massive flooding that killed at least three people, as thousands of rescuers frantically searched a shattered community for almost two dozen still missing. 

PHOTO: EPA

SEP 12, 20155:49 AM

[JOSO CITY] Japanese authorities were on Friday grappling with the aftermath of massive flooding that killed at least three people, as thousands of rescuers frantically searched a shattered community for almost two dozen still missing.

The heaviest rain in decades pounded the country in the wake of Typhoon Etau, which smashed through Japan this week, leaving a trail of destruction in its wake.

Hundreds of thousands were ordered to leave their homes and at least 22 people - including a pair of eight-year-old children - were still unaccounted for late Friday in disaster-struck Joso city, which lies about 60 kilometres (37 miles) outside Tokyo. Another person was missing in a northern prefecture.

Ryosei Akazawa, a member of Prime Minister Shinzo Abe's cabinet, acknowledged that emergency personnel still did not know the whereabouts of the missing, as fears grow that the death toll will rise.

"We are in a situation where we have yet to confirm where these missing people are," said Akazawa, the Cabinet Office's state minister, after visiting the devastated area.

Parts of Joso, a community of 65,000 residents, were destroyed Thursday when a levee on the Kinugawa river gave way, flooding an area that reportedly spans 32 square kilometres (12 square miles).

Jiji Press news agency reported Saturday that almost 11,000 homes had been flooded.

Dramatic aerial footage showed whole houses being swept away by raging torrents in scenes eerily reminiscent of the devastating tsunami that crushed Japan's northeast coast four years ago.

Desperate Joso residents waved towels as they stood on balconies trying to summon help, while military dinghies ferried dozens of people to safety, and helicopters plucked individuals from rooftops.

Hundreds of people are believed to still be trapped in buildings, while more than 600 had been rescued in Ibaraki prefecture, where Joso is located, by Friday evening.

Some frightened Joso residents took to social media on their smartphones to beg for help as the muddy brown waves swirled around their doomed houses, while trees were uprooted and cars bobbed in the dirty water.

"I don't know what to do as my house has been inundated," 23-year-old nurse Kentaro Sato told Kyodo News.

One woman said she was anxiously awaiting details about her family at an emergency shelter, after leaving her husband and children to go shopping Thursday morning. She was unable to return home due to the flooding.

"I have been here since yesterday morning... and I do not have any news about my family," said the woman in her 60s who gave her last name as Furuya.

The government started drainage operations at the swollen river while repair work on its dykes were reportedly expected to take about a week.

"I still feel the trauma" from the tsunami, a woman told public broadcaster NHK from a shelter in Minami Soma, one of the areas hit by the 2011 disaster that also triggered reactor meltdowns at the Fukushima nuclear plant.

"I was ready to run away as soon as the evacuation order was issued." Some 5,800 troops, police and firefighters have been dispatched to flooded areas where rescuers continued to work through the night.

People were seen wading through waist-high water to reach evacuation shelters, where thousands are staying across affected regions.

Another river in Miyagi prefecture, north of Ibaraki, burst its banks and flooded a populated area but many residents had already been evacuated, reports said.

In Kanuma city, north of Joso, a 63-year-old woman was killed after being swallowed by landslides triggered by the heavy rain, while a 48-year-old woman was also found dead in Miyagi, officials said.

Police said the third victim was a 25-year-old man helping to clear clogged drains in the city of Nikko, which is known for its historic shrines.

The heavy rains also affected those who are still in temporary shelters following the 2011 tsunami.

Flooding further complicated a contaminated water problem at the crippled Fukushima plant, where the site's drainage pumps were overwhelmed, sending radiation-tainted water into the ocean.

As the rain let up on Friday, pumps were no longer overwhelmed, according to the site's operator.

Automaker Toyota temporarily shut three production plants in affected areas Friday, but said they would reopen later in the day.

Japan is no stranger to natural disasters, and is frequently rocked by typhoons.

However, nothing in recent memory has compared with the tsunami of 2011, when more than 18,000 people were killed.

AFP

      

Obama to shun Chinese-owned Waldorf hotel

SEP 12, 20155:43 AM

[WASHINGTON] President Barack Obama will forego his normal digs at New York's Waldorf Astoria during the UN General Assembly this month, after the hotel was bought by a Chinese insurance firm.

White House spokesman Josh Earnest said Mr Obama and the US delegation would stay at the nearby New York Palace Hotel.

"There are a range of considerations that influence where the president will stay when he's not at the White House," Mr Earnest said.

"Those considerations include everything from available space, to cost and to security." The announcement comes just weeks before Chinese President Xi Jinping comes to Washington for a visit beset by tensions over cyber security, maritime claims and China's growing assertiveness.

Earnest would not say whether the Chinese acquisition of the Astoria had raised concerns about possible espionage.

Anbang Insurance Group bought the landmark luxury hotel late last year for US$1.95 billion.

For years it has been used as a base for US operations when leaders from around the world descend on Manhattan for the UN General Assembly meeting.

The State Department has long held a suite at the Waldorf for the US ambassador to the United Nations, currently Samantha Power.

State Department spokesman John Kirby refused to be drawn on whether officials are concerned about privacy issues at a Chinese-owned hotel, but confirmed the US delegation to the General Assembly would stay elsewhere.

"Security is always a concern, as you know, but I don't have anything to announce about Ambassador Power's residence, for the time being she's at the Waldorf," he said.

"We constantly review accommodations, especially for our diplomats, and that will continue in this case. We're not going to discuss the factors that go into contractual engagements that we make." The Waldorf Astoria occupies a full city block in midtown Manhattan, and has been in business for more than a century.

In 1993, the hotel was declared an official New York City landmark, joining the Empire State Building and the Brooklyn Bridge.

AFP