The ride on Wall Street has gotten bumpier over the past week as economic and credit jitters have intensified, but the stock market has managed to hold fast in the face of turbulence.
The market managed to ride out with little damage news of a government rescue of mortgage giants Fannie Mae and Freddie Mac as well as possible meltdown at investment giant Lehman Brothers.
In the coming week, a US Federal Reserve meeting will be a focal point as the market looks for assurances the central bank will continue its stimulative monetary policy.
Amid the turbulence, the market managed to end the week in positive territory.
The blue-chip Dow Jones Industrial Average rose 1.79 percent for the week to 11,421.99 and the broad-market Standard & Poor’s 500 index increased 0.75 percent to 1,251.70.
The technology-heavy NASDAQ composite eked out a gain of 0.23 percent to 2,261.27.
The resilient performance on Wall Street, some say, suggests the market is not overreacting to the latest economic and corporate woes and hoping for a possible recovery in the coming months.
“As they say, it’s always darkest before dawn,” said Avery Shenfeld, economist at CIBC World Markets. “The skies over the US economy have materially darkened in recent days, giving fodder to those who have been crying recession, and crying wolf thus far given how strong the economy proved to be this spring.”
Shenfeld said low interest, the impact of the government stimulus and a likely “bottoming” in home prices will leaded to “a 2009 sunrise.”
Mark Zandi at Economy.com agreed that the gloom may be an overreaction.
“The current tone of pessimism seems overdone,” he said. “Despite the tumult, the bottom for the housing market, financial system and economy is coming into view. The US still faces a painful slog, lasting well into 2009, but by this time next year a self-sustaining economic recovery is expected to begin.”
A bright spot for the economy is the sharp drop in energy prices, with crude oil dipping below US$100 a barrel from records above US$147 earlier this year.
This offers a variety of benefits, boosting consumer spending power and easing inflation.
“Lower energy costs, with crude oil prices off 30 percent from earlier highs, have begun to impact the economy, with the effects likely to build in coming weeks,” Bank of America economist Peter Kretzmer said.
The softer inflation will also ease pressure on the Federal Reserve, allowing the central bank to keep its stimulative base rate of 2 percent in place to nurture along a weak economy, Kretzmer added.
Bond prices were mixed. The yield on the 10-year Treasury bond fell to 3.370 percent from 3.660 percent a week earlier, and that on the 30-year bond rose to 4.326 percent against 4.276 percent. Bond yields and prices move in opposite directions.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats
RSS