Wall Street is set to reopen following a holiday weekend in search of direction after a choppy week, with worries over the recession-mired economy and the US government’s mounting debt weighing on the market.
The Dow Jones Industrial Average rose 0.10 percent in the week to Friday to 8.277.32.
The tech-dominated NASDAQ added 0.71 percent to 1,692.01, while the broad-market Standard & Poor’s 500 index climbed 0.47 percent in the week to 887.00.
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Investors could be hearing a warning in the market bromide of “sell in May and go away” as they consolidated positions ahead of a three-day weekend, with the stocks and bond market closed tomorrow for the Memorial Day holiday that starts the US summer vacation season.
Worries about rising unemployment, home foreclosures and the trillions of dollars the government is spending to shore up the economy left little room to dream of lazy afternoons in the sun.
Government debt ratings gripped the attention of markets after Standard & Poor’s on Thursday warned Britain was at risk of losing its triple-A rating.
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Fresh concerns that the debt-swollen US could lose its triple-A rating triggered steep selloffs in equities and weakened the US dollar.
Bonds plunged on the rating concerns. The yield on the 10-year US Treasury bond shot up to 3.448 percent from 3.123 percent a week earlier and that on the 30-year bond leapt to 4.392 percent from 4.083 percent. Bond yields and prices move in opposite directions.
The modest equities rise came after a selloff last week that had snapped a two-month rally as investors appeared to grow disenchanted with seeing “green shoots” of recovery in weak economic and company reports.
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A series of worse-than-expected economic data hung over the market.
A surprise drop last month’s retail sales suggested “green shoots withering,” Ian Shepherdson at High Frequency Economics said. “There is no momentum in spending; the freefall is over but shredded balance sheets and declining incomes mean a broadly flat trend is about the best we can expect.”
The US Treasury’s June 1 deadline for General Motors to submit an acceptable restructuring plan or face bankruptcy also weighed on the market. A filing for bankruptcy protection by the biggest US automaker could cause another surge in unemployment, following rival Chrysler’s collapse.
New claims for unemployment benefits rose more than expected and the insured employment rate hit 5 percent for the first time since 1982.
The holiday-shortened week will be packed with key economic data to digest, from a reading on consumer confidence for this month on Tuesday to durable goods orders on Thursday.
On Friday, the US government will give its second estimate of first-quarter GDP activity. The economy shrank a punishing 6.1 percent, according to the initial estimate, after contracting at an annualized rate of 6.3 percent in the fourth quarter.
A Merrill Lynch survey offered a ray of hope, showing fund managers had turned sharply bullish from the “dark days” of last October when the global firestorm accelerated and 60 percent had forecast a worsening outlook.
“In May’s survey, a net 57 percent say the economy will improve over the next 12 months, up from 26 percent in April,” the company said.
Super Typhoon Kong-rey is the largest cyclone to impact Taiwan in 27 years, the Central Weather Administration (CWA) said today. Kong-rey’s radius of maximum wind (RMW) — the distance between the center of a cyclone and its band of strongest winds — has expanded to 320km, CWA forecaster Chang Chun-yao (張竣堯) said. The last time a typhoon of comparable strength with an RMW larger than 300km made landfall in Taiwan was Typhoon Herb in 1996, he said. Herb made landfall between Keelung and Suao (蘇澳) in Yilan County with an RMW of 350km, Chang said. The weather station in Alishan (阿里山) recorded 1.09m of
STORM’S PATH: Kong-Rey could be the first typhoon to make landfall in Taiwan in November since Gilda in 1967. Taitung-Green Island ferry services have been halted Tropical Storm Kong-rey is forecast to strengthen into a typhoon early today and could make landfall in Taitung County between late Thursday and early Friday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, Kong-Rey was 1,030km east-southeast of Oluanpi (鵝鑾鼻), the nation’s southernmost point, and was moving west at 7kph. The tropical storm was packing maximum sustained winds of 101kph, with gusts of up to 126 kph, CWA data showed. After landing in Taitung, the eye of the storm is forecast to move into the Taiwan Strait through central Taiwan on Friday morning, the agency said. With the storm moving
NO WORK, CLASS: President William Lai urged people in the eastern, southern and northern parts of the country to be on alert, with Typhoon Kong-rey approaching Typhoon Kong-rey is expected to make landfall on Taiwan’s east coast today, with work and classes canceled nationwide. Packing gusts of nearly 300kph, the storm yesterday intensified into a typhoon and was expected to gain even more strength before hitting Taitung County, the US Navy’s Joint Typhoon Warning Center said. The storm is forecast to cross Taiwan’s south, enter the Taiwan Strait and head toward China, the Central Weather Administration (CWA) said. The CWA labeled the storm a “strong typhoon,” the most powerful on its scale. Up to 1.2m of rainfall was expected in mountainous areas of eastern Taiwan and destructive winds are likely
The Central Weather Administration (CWA) yesterday at 5:30pm issued a sea warning for Typhoon Kong-rey as the storm drew closer to the east coast. As of 8pm yesterday, the storm was 670km southeast of Oluanpi (鵝鑾鼻) and traveling northwest at 12kph to 16kph. It was packing maximum sustained winds of 162kph and gusts of up to 198kph, the CWA said. A land warning might be issued this morning for the storm, which is expected to have the strongest impact on Taiwan from tonight to early Friday morning, the agency said. Orchid Island (Lanyu, 蘭嶼) and Green Island (綠島) canceled classes and work
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