Investors reeling from a roller-coaster ride face a shortened trading week that is expected to see light trade and modest portfolio adjustments ahead of the New Year.
But analysts do not rule out a modest year-end rally to brighten up the mood in the US amid the financial turmoil.
“Right now, most traders are straining to see if Santa Claus shows up on Wall Street, as he normally does just ahead of Christmas, bringing a modest year-end rally,” DA Davidson & Co chief market strategist Frederic Dickson said.
“Looking ahead to next week, trading activity should lighten up as many on Wall Street begin to take extended year-end holiday vacations,” he said, citing possible cessation of selling pressure from year-end tax-loss selling and hedge fund redemptions.
“The professionals are deserting the ship today and they will leave instructions with their seconds in command not to take any big positions on either side,” Raymond James Equities strategist Jeff Stau said on Friday.
The market may react to updated numbers on the dwindling housing market and third-quarter GDP growth to be released by the government the coming week, Dickson said.
The market could also get a year-end boost if the US Treasury takes action to bring down home mortgage rates as expected.
“Stocks could head higher over the few remaining days of 2008 if the Treasury unveils a so-called Home Recovery Plan to lower mortgage rates and the Fed pegs the 10-year Treasury bond yield at 2 percent to facilitate this plan,” Ed Yardeni of Yardeni Research said.
“Then again, there have been so many rescue plans and liquidity facilities coming out of Washington over the past year that investors have become totally jaded about them,” he said.
In the week to Friday, the Dow Jones Industrial Average fell 0.59 percent to 8,579.11 following a 2.19 percent drop in the prior week.
The tech-studded NASDAQ rose 1.53 percent to 1,564.32, while the broad-market Standard and Poor’s 500 was up 0.93 percent to 887.88.
The market opened the week with a mild drop on Monday, but the next day saw a massive rally on the back of an interest rate cut to nearly zero by the US Federal Reserve.
But the gains were virtually wiped out the next two days, largely as a result of a plunge in oil prices that hurt Exxon Mobil and other energy firms and a lowering by Standard and Poor’s of industrial giant General Electric’s credit outlook to negative.
Despite an early rally on Friday sparked by a US$13.4 billion government rescue of General Motors and Chrysler, share prices eased at the end of trading week on concerns that the deal could unravel.
Al Goldman at Wachovia Securities said the rally “ran out of fuel quickly as the market took a second look at the plan.”
He said the market pulled back after the United Auto Workers union “served notice it will fight to change terms which it says unfairly single out workers.”
ANNOUNCEMENT: People who do not comply with the ban after a spoken warning would be reported to the police, the airport company said on Friday Taoyuan International Airport Corp on Friday announced that riding on vehicles, including scooter-suitcases (also known as “scootcases”), bicycles, scooters and skateboards, is prohibited in the airport’s terminals. Those using such vehicles should manually pull them or place them on luggage trolleys, the company said in a Facebook post. The ban intends to maintain order and protect travelers’ safety, as the airport often sees large crowds of people, it said, adding that it has stepped up publicity for the regulation, and those who do not comply after a spoken warning would be reported to the police. The company yesterday said that
NEW YEAR’S ADDRESS: ‘No matter what threats and challenges Taiwan faces, democracy is the only path,’ William Lai said, urging progress ‘without looking back’ President William Lai (賴清德) yesterday urged parties across the political divide to democratically resolve conflicts that have plagued domestic politics within Taiwan’s constitutional system. In his first New Year’s Day address since becoming president on May 20 last year, Lai touched on several issues, including economic and security challenges, but a key emphasis was on the partisan wrangling that has characterized his first seven months in office. Taiwan has transformed from authoritarianism into today’s democracy and that democracy is the future, Lai said. “No matter what threats and challenges Taiwan faces, democracy is the only path for Taiwan,” he said. “The only choice
QUIET START: Nearly a week after applications opened, agencies did not announce or promote the program, nor did they explain how it differed from other visitor visas Taiwan has launched a six-month “digital nomad visitor visa” program for foreign nationals from its list of visa-exempt countries who meet financial eligibility criteria and provide proof of work contracts. To apply, foreign nationals must either provide proof that they have obtained a digital nomad visa issued by another country or demonstrate earnings based on age brackets, the Bureau of Consular Affairs said. Applicants aged 20 to 29 must show they earned an annual salary of at least US$20,000 or its equivalent in one of the past two years, while those aged 30 or older must provide proof they earned US$40,000 in
TECH CORRIDOR: Technology centers and science parks in the south would be linked, bolstering the AI, semiconductor, biotech, drone, space and smart agriculture industries The Executive Yuan yesterday approved a “Southern Silicon Valley” project to promote the development of an artificial intelligence (AI) and semiconductor industry in Chiayi County, Tainan, Pingtung County and Kaohsiung. The plan would build an integrated “S-shaped semiconductor industry corridor” that links technology centers and science parks in the south, Executive Yuan spokesperson Michelle Lee (李慧芝) said yesterday after a Cabinet meeting. The project would bolster the AI, semiconductor, biotech, drone, space and smart agriculture industries, she said. The proposed tech corridor would be supported by government efforts to furnish computing power, workforce, supply chains and policy measures that encourage application and integration
RSS