US stocks ended a turbulent week by plunging to six-year lows amid concerns over ailing financial institutions and their prospective nationalization.
The Dow Jones Industrial Average fell a hefty 6.17 percent over the week to its lowest level since October 2002 at 7,365.67 on Friday, dogged by concerns that key banks such as Bank of America and Citigroup will be taken over by the government. The tech-rich NASDAQ composite fell 6.07 percent over the week to 1,441.23 and the broad-market Standard & Poor’s 500 tumbled 6.87 percent to 770.05.
The market continued to falter even after US President Barack Obama signed a bill for a nearly US$800 billion economic stimulus package and unveiled a multibillion dollar plan to contain a home mortgage crisis at the epicenter of global financial turmoil.
Investors zeroed in on the financial stocks amid concerns over bad assets troubling banks and rumors over their nationalization which the Obama administration moved to dispel.
“Financial stocks continue to represent the biggest concern for the broader market, and will continue to do so in the coming week,” Briefing.com said.
Uncertainty remain “regarding the depth and duration of the global recession and exacerbated fears that more pain and restructuring may lie ahead for the financial sector,” analysts at Charles Schwab & Co said in a report.
“It may take quite a bit more policy force to break the back of the recession” that has gripped the US for the past year, economists at IHS Global Insight wrote.
The US government is scheduled to release in the coming week a preliminary GDP projection for the fourth quarter of last year — the second update on economic activity for the quarter. Most economists surveyed expect that GDP in the quarter fell 5.4 percent, subsequent to receiving revisions to data after the first reading of negative 3.8 percent.
The GDP decline “is expected to be more severe than previously reported,” IHS Global Insight said.
Other fresh data to be released next week “will not do much to allay” concerns over the economy, it said. Among others, consumer confidence measures for this month as a whole are expected to sink and total new and existing home sales are expected to have declined last month, the market analysis firm said.
PLA MANEUVERS: Although Beijing has yet to formally announce military drills, its coast guard vessels have been spotted near and around Taiwan since Friday The Taiwanese military is on high alert and is closely monitoring the Chinese People’s Liberation Army’s (PLA) air and naval deployments after Beijing yesterday reserved seven airspace areas east of its Zhejiang and Fujian provinces through Wednesday. Beijing’s action was perceived as a precursor to a potential third “Joint Sword” military exercise, which national security experts said the PLA could launch following President William Lai’s (賴清德) state visits to the nation’s three Pacific allies and stopovers in Hawaii and Guam last week. Unlike the Joint Sword military exercises in May and October, when Beijing provided detailed information about the affected areas, it
Five flights have been arranged to help nearly 2,000 Taiwanese tourists return home from Okinawa after being stranded due to cruise ship maintenance issues, the Ministry of Transportation and Communications announced yesterday. China Airlines Ltd (中華航空), and EVA Airways Corp (長榮航空) have arranged five flights with a total of 748 additional seats to transport 1,857 passengers from the MSC Bellissima back to Taiwan, the ministry said. The flights have been scheduled for yesterday and today by the Civil Aviation Administration, with the cruise operator covering all associated costs. The MSC Bellissima, carrying 4,341 passengers, departed from Keelung on Wednesday last week for Okinawa,
US president-elect Donald Trump said he would “never say” if Washington is committed to defending Taiwan from China, but “I would prefer that they do not do it [ an attack],” adding that he has a “good relationship” with Chinese President Xi Jinping (習近平). “I never say because I have to negotiate things, right?” Trump said in an interview with NBC’s Meet the Press host Kristen Welker after saying he would not reveal his incoming administration’s stance on Taiwan’s defense in the event of an attack. Asked the question again, Trump, in a reference to China, said: “I would prefer that they
CROSS-STRAIT TENSIONS: MOFA demanded Beijing stop its military intimidation and ‘irrational behavior’ that endanger peace and stability in the Indo-Pacific region The Presidential Office yesterday called on China to stop all “provocative acts,” saying ongoing Chinese military activity in the nearby waters of Taiwan was a “blatant disruption” of the “status quo” of security and stability in the Indo-Pacific region. Defense officials said they have detected Chinese ships since Monday, both off Taiwan and farther out along the first island chain. They described the formations as two walls designed to demonstrate that the waters belong to China. The Ministry of National Defense yesterday said it had detected 53 military aircraft operating around the nation over the past 24 hours, as well
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