Business
U.S. Stocks Bounce Back
WASHINGTON – Stocks advanced, as upbeat corporate news helped stabilize shares that have been hit in recent days by turmoil in overseas markets.
The rebound in stocks followed a report that showed the U.S. economy expanded at a steady pace in the final three months of 2013.
The Dow Jones Industrial Average advanced 70 points, or 0.5%, to 15808 in late-morning trading. The S&P 500 rose 15 points, or 0.8%, to 1789, and the Nasdaq Composite Index added 59 points, or 1.5%, to 4111.
Struggling growth in developing economies combined with worries about Federal Reserve policies triggered a rush of cash to exit those countries in recent days, pummeling emerging-market currencies and drawing out sellers of global stocks.
The Dow industrials closed at their lowest level since Nov. 7 on Wednesday, having fallen for the sixth time in seven sessions.
“A lot of turmoil in emerging markets has been freaking people out,” said Frank Ingarra, head trader at NorthCoast Asset Management.Mr. Ingarra said that his firm remains fully invested in stocks and hasn’t moved to swap shares for cash. In part, that is because the S&P 500′s 30% gain in 2013 left the U.S. market “overdue” for a pullback, he said.
Still, Mr. Ingarra said many investors remain “skeptical” that now is the time to step in and buy stocks until more signs of stabilization materialize.
Big gains in individual stocks powered Thursday’s rebound as shares of health-care and consumer discretionary companies led seven of the S&P 500′s 10 sectors higher.
Facebook surged after the social network reported late Wednesday fourth-quarter earnings and revenue that exceeded forecasts, boosted by strength in mobile advertising.
Google rallied after agreeing to sell its wireless-handset business to China’s Lenovo for about $2.9 billion in cash and stock, less than two years after Google purchased Motorola Mobility.
Dow component Visa advanced after reporting better-than-expected fiscal first-quarter earnings and revenue amid strong growth in payments volume.Quincy Krosby, market strategist at Prudential Financial, which manages about $1 trillion in assets, said that while she is encouraged to see the market reacting positively to corporate earnings, there is still no evidence suggesting the recent pullback is over.
“You’re always going to get a technical bounce, but the market probably wants to test lower levels,” she said.
Ms. Krosby said that she is waiting to see more buying on higher volume, a sign of “investor commitment,” before she steps back into the market to buy stocks.
Before Thursday’s opening bell, the first reading of fourth-quarter gross domestic product showed growth of 3.2%, matching forecasts. Separately, initial claims for jobless benefits in the latest week rose by 19,000 to 348,000 versus expectations of 330,000.
Emerging-market currencies recovered from earlier losses on Thursday.
The Turkish lira and South African rand bounced back from earlier lows, as did the Russian ruble, which earlier Thursday slumped near a five-year low against the dollar. The dollar edged up against the euro and the yen.Recent efforts by emerging-market central banks to stem capital outflows have had little effect, and the Fed’s move on Wednesday to reduce bond purchases had put additional pressure on the battered currencies.
The iShares MSCI Emerging Markets stock exchange-traded fund gained 1.1% in U.S. trading, after falling 1.4% to a five-month low on Wednesday.
The yield on the 10-year Treasury note ticked up to 2.708% from a 2½-month low of 2.675% on Wednesday.
Crude-oil futures gained 0.9% to $98.21 a barrel, while gold futures eased 1.6% to $1,242.40a troy ounce.
In Europe, the Stoxx Europe 600 recouped early losses and rose 0.2%. Germany’s DAX 30 index advanced 0.2%, despite data showing that jobless claims fell more than expected in January.
Asian markets were broadly lower after HSBC’s China Purchasing Managers’ Index for January confirmed last week’s preliminary reading that China’s manufacturing sector contracted in January. Last week’s data had helped spark the selloff in emerging-market currencies. China’s Shanghai Composite fell 0.8% and Japan’s Nikkei Stock Average shed 2.5%.
– WALLSTREET JOURNAL
The World Bank has uncovered $32 million in unaccounted funds linked to a water infrastructure project in Nigeria, raising concerns about financial mismanagement in donor-funded initiatives.
The discovery was highlighted in the bank’s recently published FY2024 Sanctions System Annual Report, which revealed significant discrepancies in the project’s financial records.
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The missing funds were earmarked to bolster Nigeria’s water infrastructure, but irregularities in accounting prompted an investigation by the World Bank’s Integrity Vice Presidency (INT).
“INT followed up on risks identified regarding a project in Nigeria’s water sector and flagged to operations the risk, which was associated with $32 million of unaccounted funds,” the report noted.
In response, the World Bank engaged with key stakeholders, including the project’s task team leader, operations manager, and financial management specialist, to recover the funds and safeguard the project’s integrity.
As part of the resolution, the Central Bank of Nigeria has been requested to reimburse $22 million. Meanwhile, $6 million remains in the project’s account to cover ongoing operational costs.
The findings underscore the importance of transparency and robust financial oversight in large-scale infrastructure projects, particularly those funded by international institutions.
The Central Bank of Nigeria (CBN) has issued a stern warning to Deposit Money Banks (DMBs) over the illegal sale of mint Naira notes to currency hawkers.
The apex bank, in a circular signed by the Acting Director of Currency Operations, Mr. Solaja Olayemi, on Friday, emphasized that erring banks would face stringent penalties.
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As part of its efforts to curb the abuse of the national currency, the CBN announced plans to conduct nationwide checks to seize mint notes sold by hawkers.
Banks found to have released such notes will be required to pay a fine of 10% of the value of the affected cash withdrawn from the CBN on the date in question.
Subsequent violations will attract an additional penalty incrementally increased by 5%.
The CBN also reiterated its commitment to enforcing the Clean Notes Policy, warning that banks involved in hoarding, diversion, or any actions that disrupt efficient cash distribution would face appropriate sanctions.
With the festive season fast approaching, the apex bank urged DMBs to enhance internal controls to ensure transparent cash distribution.
It highlighted the need for proper utilization of Automated Teller Machines (ATMs) to ensure easy access to new notes by the public.
Furthermore, the CBN disclosed plans to intensify its mystery shopping and spot checks, working closely with law enforcement agencies to clamp down on any practices that undermine the integrity of the Naira.
Nigeria’s inflation rate surged to 33.88% in October 2024, up from 32.7% in September, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS) on Friday.
The month-on-month increase of 1.18 percentage points marks yet another strain on the nation’s economy, with transportation and food costs cited as the main drivers of inflation.
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Steep Year-on-Year Increase
Compared to October 2023, when the inflation rate stood at 27.33%, the October 2024 figure reflects a significant rise of 6.55 percentage points. This sustained upward trend highlights the worsening cost-of-living crisis for Nigerians.
Month-on-Month Breakdown
Inflation on a month-on-month basis also showed an uptick, rising to 2.64% in October 2024 from 2.52% in September. The faster rate of price increases further underscores the growing economic pressure on households.
Food Inflation Soars to 39.16%
Food inflation, a major component of the headline rate, reached 39.16% in October 2024, up from 31.52% in the same month last year.
The increase was driven by higher prices of staple items, including: Cereals and Tubers: Guinea Corn, Rice, Maize Grains, Yam, Water Yam, and Coco Yam. Oils and Fats: Palm Oil and Vegetable Oil. Beverages: Milo, Lipton, and Bourvita.
On a month-on-month basis, food inflation rose by 0.30 percentage points to 2.94% in October, up from 2.64% in September.
Price hikes in Palm Oil, Vegetable Oil, Fish, Meat, and Bread categories were major contributors.
Annual Food Inflation Hits 38.12%
The average annual food inflation rate over the past 12 months climbed to 38.12%, a sharp increase of 11.79 percentage points from the 26.33% recorded in October 2023.
The consistent rise in inflation, particularly food and transportation costs, continues to erode the purchasing power of Nigerians.
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