Business
Stocks fall after mixed economic data, earnings
A disappointing report on housing starts made investors nervous about the economy Tuesday and sent stocks lower even as profits at many companies exceed expectations.
Stocks fell from 2009 highs after the Commerce Department said home building rose less than expected in September, a discouraging signal for future construction activity.
The market will get another measure of the housing market’s health Friday with a report on existing home sales. After several months of encouraging data on housing, investors have become disappointed in recent weeks with signs that a recovery in home building and home sales is starting to falter, which could bode poorly for the broader economy.
A rebound in the dollar from a 14-month low against other major currencies also hurt stocks by driving down commodity prices and, in turn, hurting energy and materials companies.
The housing data and the stronger dollar overshadowed strong earnings reports from Apple Inc., Caterpillar Inc. and health insurer UnitedHealth Group Inc.
There was more trouble for stocks from a Labor Department report finding that energy prices pushed U.S. wholesale prices lower in September, leaving a larger-than-expected monthly drop in the producer price index. That report helped lift the bond market, however, which tends to rise on signs of muted inflation and slow economic growth.
But Schaeffer’s Investment Research analyst Todd Salamone said the market’s ability to avoid a big slide is an encouraging sign.
“We’ve got a report that’s disappointing and the bears haven’t really gained control here,” he said. “It’s a good excuse just to take a breather.”
According to preliminary calculations, the Dow Jones industrial average fell 50.71, or 0.5 percent, to 10,041.48.
The broader Standard & Poor’s 500 index fell 6.85, or 0.6 percent, to 1,091.06, and the Nasdaq composite index fell 12.85, or 0.6 percent, to 2,163.47.
Treasury prices rose, pushing their yields lower, after the drop in producer prices. Inflation is a worry for bond investors because rising prices can eat into returns. The yield on the 10-year Treasury note fell to 3.34 percent from 3.39 percent late Monday.
The dollar and gold rose. Crude oil lost ground for the first time in a week, falling 52 cents to settle at $79.09 a barrel on the New York Mercantile Exchange. Oil rose to $80.05 during the day, its highest level in a year.
The day’s slide came as investors navigate a busy week of corporate earnings reports for signals about the economy. Profits have topped expectations but many companies have relied on slashing costs to boost profits as they did in the first half of the year. That has some analysts worried.
Dan Cook, senior market analyst at IG Markets in Chicago, is concerned that companies aren’t bringing in more revenue. He noted that reducing costs by laying off workers adds to the problems facing the overall economy.
“We call it cost-cutting because that’s kind of the nice term, but in reality a lot of those are consumers,” he said.
Cook said companies won’t be able to keep coming up with earnings that top expectations if improved profits don’t translate to a stronger economy.
“Right now we’re on a divergent path,” he said, referring to earnings and the economy. “It’s only a matter of time before that has to catch up.”
Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, contends that for now, any improvement in profits are good.
“In these tough times any kind of earnings power that these companies are talking about whether it’s revenue growth or cost-cutting — we’re happy about it,” he said.
Apple reported much stronger profits after the markets closed on Monday, citing big gains in sales of iPhones and Mac computers. Texas Instruments’ results came in above the improved forecast the chip maker issued last month.
Apple closed up $8.90, or 4.7 percent, at $198.76, after trading at a 12-month high of $201.75. Texas Instruments rose 14 cents to $23.66.
Caterpillar rose $1.76, or 3 percent, to $59.61, while UnitedHealth Group jumped $1.04, or 4.2 percent, to $25.96.
Two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 1.2 billion shares compared with 1.1 billion Monday.
The Russell 2000 index of smaller companies fell 8.93, or 1.4 percent, to 613.41.
Overseas, Britain’s FTSE 100 fell 0.7 percent, Germany’s DAX index lost 0.7 percent and France’s CAC-40 fell 0.5 percent. Japan’s Nikkei stock average rose 1 percent.
Business
NIGCOMSAT Seeks Policy To Harness AI Potentials
The Nigerian Communications Satellite Limited (NIGCOMSAT), the country’s satellite operator, has called for immediate promolgation of policy action that will enable the country to harness the potentials of Artificial Intelligence (AI).
NIGCOMSAT, also warned that Nigeria risks missing out on Africa’s projected $1.2trillion share of the global AI economy by 2030.
Managing Director of NIGCOMSAT, Nkechi Egerton-Idehen, disclosed this in a statement issued at the weekend following her participation in the Meeting of the National Council for Communications, Innovation, and Digital Economy.
“Artificial intelligence is reshaping industries, economies, and societies worldwide, with projections that it will contribute up to $15.7trillion to the global economy by 2030. Africa stands to gain $1.2trillion of this if the right policies and innovations are in place”, Idehen said, citing a PricewaterhouseCoopers report.
The NIGCOMSAT MD underscored the transformative potential of AI in agriculture, highlighting its applicability in Benue State, widely regarded as Nigeria’s “food basket.”
According to her, machine learning tools could revolutionize agricultural practices by improving pest detection and optimizing planting schedules using satellite imagery.
“AI offers us the chance to not only flourish economically but also to achieve food security. However, we must ask ourselves if we are prepared to manage this technology responsibly”, she added.
Idehen also noted that internet access remains a significant barrier to AI adoption in Nigeria.
“For AI tools to be effective, basic digital infrastructure is essential. Addressing this gap must be a priority.
“AI is happening. We have the opportunity to manage this technology revolution responsibly, both in Africa and globally, through innovation and governance”, she said.
In August 2024, the Federal Ministry of Communications, Innovation, and Digital Economy released a draft National Artificial Intelligence Strategy, aiming to position Nigeria as a global leader in AI.
Corlins Walter
Business
We Have Spent N1bn On Electrification -LG Boss
The Chairman of Emohua Local Government Council, Chief David Omereji, has said the council has so far spent over N1 billion for the electrification of communities in the area.
Omereji said this while addressing staff of the council at the council headquarters recently.
He said the move was part of his administration’s resolve to ensure peace and development of the LGA.
According to him, the Council spent about N29 million on monthly basis for the maintenance of the Emohua Local Vigilante group known as OSPAC, with each member being paid a stipend of N100, 000 monthly.
He diaclosed that 11 out of the 14 wards are currently enjoying electricity, while efforts are on to light-up the remaining ones.
“I also want to use this opportunity to inform the political class for purposes of records and for the understanding of the people that the Council under my watch have done more than enough”, he said .
The Emolga boss explained that all that have been achieved were through the personal effort of the Council, without support from anybody as rumoured in some quarters.
Omereji further reaveled that a number of other projects, including roads, fencing of schools, hospitals, courts premises, and reconstruction of some abandoned buildings at the Council Headquarters are being undertaken by his administration.
He enjoined the people of the area to support his administration’s drive to bring purposeful development to the LGA.
The Emohua Council boss, who reiterated his hatred for noise making, stated that his works would speak for him, and solicited the support of staff of the council and the entire people of the area.
He noted the fact that some people may not be happy with his achievements, saying that he would remain focused, while advising critics of his government to do so constructively with facts and figures.
King Onunwor
Business
Ogoni Rejects NNPC-Sahara OML11 Deal … Wants FG’s Intervention
The Movement for the Survival of the Ogoni People (MOSOP) has raised some ethical questions over a Financial and Technical Services Agreement (FTSA) between Sahara Energy and West African Gas Limited (WAGL), an affiliate of the Nigerian National Petroleum Company (NNPC).
MOSOP said the agreement was not done in good faith, not in the interest of the Nigerian people, and did not follow due process.
Foremost Ogoni born activist and MOSOP leader, Fegalo Nsuke, who made this known in Abuja, weekend, described the Sahara-WAGL deal as fraudulent, deceptive and an insult on the intelligence and integrity of the Nigerian nation.
Nsuke called on President Bola Ahmed Tinubu to cancel that FTSA between Sahara Energy and WAGL, noting that the agreement is fraught with irregularities and deceptive.
“What Sahara and the NNPC did in the FTSA between Sahara and WAGL is shameful and depicts high level corruption in public service of our country.
“WAGL is an affiliate of Sahara and the NNPC. How then can Sahara go into an agreement with its own affiliate? It’s as good as going into an agreement with itself. This is deceptive and fraudulent”, Nsuke said.
He continued that “Sahara Energy is certainly not a company the Ogoni people want on their soil and we are calling on Mr. President, Bola Ahmed Tinubu, to terminate any deal between the NNPC and Sahara Energy over OML 11, and to allow for an inclusive arrangement that considers a fair treatment of the Ogoni people in the distribution of revenues from natural resource extraction on Ogoni soil.
“The last Ogoni Congress has been unequivocal on the Ogoni demand for justice and has given a clear path to resolve the three decade old conflict between all critical parties.
“It will be good to explore this path to peace and development for Ogoni and for our country”.
Nsuke accused Sahara Energy and the NNPC of frustrating the progress made by MOSOP to achieve a permanent solution to the Ogoni problem.
He urged a presidential intervention with deep consideration for a fair treatment of the Ogoni people in order to permanently address the problem.
He noted that Sahara Energy should give up on the Ogoni area to allow for an engagement in the interest of the country and the people.
Recall that MOSOP and Sagara Energy have recently been engaged in a row in what MOSOP describes as an unholy relationship between Sahara Energy and the NNPC over OML 11.
MOSOP expressly rejected Sahara Energy and called for a fair treatment of the Ogoni people in natural resource extraction in Ogoni.
It noted that Ogoni people, led by MOSOP, paid the sacrifice to take the oil from Shell, hence “the position of MOSOP must be taken into consideration in decisions relating to resumption of oil production in Ogoni”.
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