Article – BusinessDesk
Jan 17 (BusinessDesk) Wall Street was mixed as concern about the outlook for the global economy offset solid earnings including by Goldman Sachs.
While you were sleeping: Growth worry caps Wall Street
Jan 17 (BusinessDesk) – Wall Street was mixed as concern about the outlook for the global economy offset solid earnings including by Goldman Sachs.
The World Bank downgraded its economic forecast, estimating that global GDP will expand 2.4 percent in 2013, down from a June forecast of 3 percent, after growing 2.3 percent in 2012. Growth will “gradually” strengthen to 3.1 percent in 2014 and 3.3 percent in 2015, it said in its Global Economic Prospects report released yesterday.
“The economic recovery remains fragile and uncertain, clouding the prospect for rapid improvement and a return to more robust economic growth,” World Bank Group President Jim Yong Kim said in a statement.
The World Bank said the euro zone economy will contract by 0.1 percent this year, before growing 0.9 percent in 2014 and 1.4 percent in 2015.
Separately, Germany downgraded its forecast for the pace of the nation’s economic growth to 0.4 percent this year, down from a previous estimate of 1 percent, and down from 0.7 percent in 2012.
There was, however, good news on the earnings front. Shares of Goldman Sachs gained, last up 3.5 percent, after the bank’s profit nearly tripled.
And economic indicators also underpinned a sense of cautious optimism about the world’s largest economy.
US industrial production rose 0.3 percent in December, while manufacturing output increased 0.8 percent last month, according to the Federal Reserve.
“There is every indication that the improvement may be a reflection of a broader pick-up in overall economic activity,” Millan Mulraine, an economist at TD Securities in New York, told Reuters.
In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.25 percent, while the Standard & Poor’s 500 Index fell 0.10 percent. The Nasdaq Composite Index rose 0.11 percent underpinned by a rebound in Apple shares, last up 3.6 percent from the lowest level in 11 months.
Shares of Boeing dropped, last down 3.3 percent, after another incident involving its 787 passenger aircraft. This time, All Nippon Airways and Japan Airlines grounded their entire fleet of Dreamliners after one was forced to make an emergency landing.
“I think you’re nearing the tipping point where they need to regard this as a serious crisis,” Richard Aboulafia, a senior analyst with the Teal Group in Fairfax, Virginia, told Reuters. “This is going to change people’s perception of the aircraft if they don’t act quickly.”
In Europe, the Stoxx 600 Index eked out a gain of just under 0.1 percent from the previous close. The UK’s FTSE 100 fell 0.22 percent. France’s CAC 40 advanced 0.3 percent and Germany’s DAX rose 0.2 percent.
Germany sold 4 billion euros of new 10-year debt today, drumming up solid investor demand. Investors submitted bids for 1.7 times the amount of new 1.5 percent bonds due in February 2023 allotted today, compared with 1.51 times at the previous auction of 10-year securities on November 21, according to Bloomberg News.