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.”
Taiwan aims to open 18 representative offices and seven Taiwan Tourism Information Centers worldwide by next year to attract international visitors, the Tourism Administration said on Saturday. The agency has so far opened three representative offices abroad this year and would open two more before the end of the year, it said. It has also already opened information centers in Jakarta, Mumbai and Paris, and is to open one in Vancouver next month and in Manila in December, it said. Next year, it would also open offices in Amsterdam, Dubai and Sydney, it added. While the Cabinet did not mention international tourists in its
EYES AT SEA: Many marine enthusiasts have expressed interest in volunteering for coastal patrols, which would help identify stowaways and illegal fishing, the CGA said Six thousand coastal patrol volunteers are to be recruited for 159 inspection offices to enhance the nation’s response to “gray zone” conflicts, Coast Guard Administration (CGA) sources said yesterday. Volunteer teams would be established to increase the resilience of coastal defense systems in the wake of two unlawful entries attempted by Chinese over the past three months, Ocean Affairs Council Minister Kuan Bi-ling (管碧玲) said. A former Chinese navy captain drove a motorboat into the Tamsui River (淡水河) in Taipei on the eve of the Dragon Boat Festival in June, while another Chinese man sailed in a rubber boat into the Houkeng
NEXT LEVEL: The defense ministry confirmed that a video released last month featured personnel piloting new FPV drone systems being developed by the Armaments Bureau Taipei and Washington are pushing for their drone companies to work together to establish a China-free supply chain, the Financial Times reported on Friday. A delegation of high-level executives and US government officials were yesterday to arrive in Taipei to discuss with their Taiwanese counterparts collaboration on drone technology procurement and development, the report said. The executives represent 26 US manufacturers of drone and counter-drone systems, while the officials are from the US Department of Commerce and the US Department of Defense’s Defense Innovation Unit, along with Dev Shenoy, principal director for microelectronics in the Office of the Under Secretary of Defense
‘ANONYMOUS 64’: A national security official said that it is an attempt by China to increase domestic anti-Taiwanese sentiment and inflame cross-strait tensions The Ministry of National Defense’s (MND) Information, Communications and Electronic Force Command (ICEFCOM) yesterday denied accusations by China that it had undermined regional security by carrying out cyberattacks against targets in China, adding instead that Beijing was responsible for raising tensions and undermining regional peace. The Chinese Ministry of State Security on WeChat accused a hacker group called “Anonymous 64” of targeting China, Hong Kong and Macau starting earlier this year through frequent cyberattacks. The group carried out cyberattacks to seize control of Web sites, outdoor electronic billboards and video-on-demand platforms in China, Hong Kong and Macau, it said, adding the hackers’