The twists and turns of a turbulent week on Wall Street have made traders dizzy, but analysts are looking for a calmer ride in the coming week as the market digests the latest efforts to battle the financial market firestorm.
The mood has shifted from panic to euphoria as the financial system froze up. But some say the crisis in markets shows signs of easing.
The major US indexes ended little changed despite the unprecedented volatility.
The blue-chip Dow Jones Industrial Average fell 0.29 percent on the week to 11,388.44 after big rallies on Thursday and Friday recouped heavy losses earlier in the week.
The broad-market Standard & Poor’s 500 index rose 0.27 percent to 1,255.08 and the technology-heavy NASDAQ composite managed a gain of 0.56 percent to 2,273.90.
“I’m not sure I’ve ever seen such volatility,” said Andy Brooks, head of trading at T. Rowe Price, after one hectic back-and-forth session.
The historic week came as Wall Street giant Lehman Brothers collapsed after failing to find a buyer and the US government offered an US$85 billion lifeline to insurance giant American International Group Inc to stave off a financial market tsunami.
Meanwhile Merrill Lynch made an emergency deal to sell itself to Bank of America.
The government action failed to calm financial markets and at midweek credit markets appeared to seize up, forcing central banks to offer massive amounts of liquidity to the banking system. At one point, investors flocked to gold, oil and short-term Treasury bills in a massive flight to safety.
Amid the firestorm, the US government announced a plan described as “the mother of all bailouts” in an effort to help banks and financial firms purge their books of the so-called toxic mortgage assets stemming from the housing market collapse. The plan appeared to help skittish markets settle down.
“Wall Street appears to have turned the corner,” said Fred Dickson at DA Davidson & Co, reacting to what he called “a package designed to attack the problems at the heart of the financial crisis and reduce the general level of fear that has move moved onto Main Street.”
“While we doubt the comprehensive plan, in whatever form it finally emerges from Congress, immediately ends the housing crisis or will get the economy back on a more traditional growth track, it should provide stability to the stock market and restore confidence to the global banking system,” he said.
Bond prices were lower after sharp swings over the week.
The yield on the 10-year Treasury bond rose to 3.769 percent from to 3.730 percent a week earlier, and that on the 30-year bond increased to 4.366 percent from 4.326. Bond yields and prices move in opposite directions.
Japan has deployed long-range missiles in a southwestern region near China, the Japanese defense minister said yesterday, at a time when ties with Beijing are at their lowest in recent years. The missiles were installed in Kumamoto in the southern region of Kyushu, as Japan is attempting to shore up its military capacity as China steps up naval activity in the East China Sea. “Standoff defense capabilities enable us to counter the threat of enemy forces attempting to invade our country ... while ensuring the safety of our personnel,” Japanese Minister of Defense Shinjiro Koizumi said. “This is an extremely important initiative for
MORE POPULAR: Taiwan Pass sales increased by 59 percent during the first quarter compared with the same period last year, the Tourism Administration said The Tourism Administration yesterday said that it has streamlined the Taiwan Pass, with two versions available for purchase beginning today. The tourism agency has made the pass available to international tourists since 2024, allowing them to access the high-speed rail, Taiwan Railway Corp services, four MRT systems and four Taiwan Tourist Shuttles. Previously, five types of Taiwan Pass were available, but some tourists have said that the offerings were too complicated. The agency said only two types of Taiwan Pass would be available, starting from a three-day pass with the high-speed rail and a three-day pass with Taiwan Railway Corp. The former costs NT$2,800
NEW LOW: The council in 2024 based predictions on a pessimistic estimate for the nation’s total fertility rate of 0.84, but last year that rate was 0.69, 17 percent lower An expected National Development Council (NDC) report expects the nation’s population to drop below 12 million by 2065, with the old-age dependency ratio to top 100 percent sooner than 2070, sources said yesterday. The council is slated to release its latest population projections in August, using an ultra-low fertility model, the sources said. The previous report projected that Taiwan’s population would fall to 14.37 million by 2070, but based on a new estimate of the total fertility rate (TFR) — the average number of children born to a woman over her lifetime — the population is expected to reach 12 million by
COUNTERING HOSTILITY: The draft bill would require the US to increase diplomatic pressure on China and would impose sanctions on those who sabotage undersea cable networks US lawmakers on Thursday introduced a bipartisan bill to bolster the resilience of Taiwan’s submarine cables to counter China’s hostile activities. The proposal, titled the critical undersea infrastructure resilience initiative act, was cosponsored by Republican representatives Mike Lawler and Greg Stanton, and Democratic Representative Dave Min. US Senators John Curtis and Jacky Rosen also introduced a companion bill in the US Senate, which has passed markup at the chamber’s Committee on Foreign Relations. The House’s version of the bill would prioritize the deployment of sensors to detect disruptions or potential sabotage in real-time and enhance early warning capabilities through global intelligence sharing frameworks,
RSS