AIG shares added to a downbeat week for financials as US stocks finished the week mixed despite the S&P 500 touching a record high on Wednesday. Shares of the global insurance group were off 6.7 per cent to $48.21 in late morning trading on Friday after the company reported earnings that were in line with analyst estimates.

By Jason Abbruzzese, Financial Times

AIG shares added to a downbeat week for financials as US stocks finished the week mixed despite the S&P 500 touching a record high on Wednesday.
Shares of the global insurance group were off 6.7 per cent to $48.21 in late morning trading on Friday after the company reported earnings that were in line with analyst estimates. The day’s decline sent AIG back below the $50 level but shares remain 37.7 per cent higher on the year to date as the insurer has recovered from its US government bailout.

AIG added to a difficult week for financials, which was on track to be the worst performing sector in the past five days, off 1.2 per cent.
While the S&P 500 set new record intraday and closing highs earlier in the week, investors opted for defensive stocks, with the telecommunications sector up 1.9 per cent and consumer staples 0.8 per cent higher. The S&P 500 was fractionally lower at 1,756.00 on Friday, putting the index down 0.3 per cent for the week. The Dow Jones Industrial Average was 0.1 per cent higher to 15,563.97 on Friday and the Nasdaq Composite was off 0.3 per cent to 3,908.55. Earnings news was in focus for much of the week with some of the largest US companies reporting.

John Rutledge, chief investment strategist at investment house Safanad, said the continued rally highlights a lack of concern from investors that the end of the quantitative easing programme is imminent.

 

“I think this is the week when the news is settling that there is going to be no Lone Ranger riding in from the Fed. No taper, no untaper, the debt deal is behind us now, so what we’ve got here is kind of a soggy economy and a wall of bank reserves that are gradually leaking into the system,” he said. “It is a positive story for the markets in the short term. In the long term, it raises inflation issues. For my part, I’m still fully invested in things that do well when liquidity breaks through into loans – private equity stocks, small-cap stocks and the rest.”

 

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