Wall Street investors face a battery of economic news and the looming bankruptcy of auto giant General Motors in the coming week, testing the nerves of investors after a strong week.
US stocks ended a volatile holiday-shortened week on an upbeat note as investors preferred a not-so-bad outlook on mixed economic and company news.
The Dow Jones Industrial Average rose 2.69 percent in the week to Friday, to 8,500.33.
The tech-dominated NASDAQ leapt 4.85 percent to 1,774.33 while the broad-market Standard & Poor’s 500 index surged 3.61 percent in the week to 919.14.
The three major indices notched up their third straight month of increases with robust gains. The blue-chip Dow surged 4.1 percent for this month, the NASDAQ 3.32 percent and the S&P 500 by a hefty 5.31 percent.
Despite the bullish market, analysts cautioned that bumps lurk on the road to recovery from a prolonged recession that began in December 2007.
“Maybe it is simply the shortened holiday week, but volume has fallen off,” said Mike O’Rourke, chief investment strategist at BTIG brokerage.
The market came back to business on Tuesday after the Memorial Day holiday welcoming an unexpected jump in consumer confidence that left the Dow 2.37 percent higher. Trading was choppy the rest of the week as investors kept their eyes glued to the deteriorating bond markets amid concerns about the mushrooming US government debt.
Tensions on the bond market eased and bonds ended the week mixed.
The yield on the 10-year Treasury bond rose to 3.465 percent on Friday, compared with 3.448 percent a week ago, while the yield on the 30-year bond fell to 4.338 percent against 4.392 percent. Bond yields and prices move in opposite directions.
The government’s slight revision of first quarter gross domestic product, showing a 5.7 percent contraction, was a backward-looking indicator investors shrugged off, preferring to see glimmers of hope in the current quarter.
However, overhanging the market is the impending implosion of General Motors, which has a Monday deadline imposed by US President Barack Obama’s administration to submit a suitable restructuring plan or file for bankruptcy protection.
The largest US automaker and once the world’s largest is widely expected to enter a government-backed bankruptcy restructuring, but the implications of the fallout on the fragile economy are unclear.
“The GM bankruptcy filing is now viewed as inevitable on June 1, and this process will probably raise more questions than it answers,” Brian Bethune at IHS Global Insight said. “Which plants will be shut down, what brands will survive, which dealers will have to fold up operations, and what will be the impact on the supplier base — which is already reeling from recessionary conditions in the industry?”
All eyes will be on Friday’s employment report for this month. Analysts expect the report to show a loss of another 550,000 jobs and a jump in the unemployment rate to 9.2 percent.
Also See: US economy shrank 5.7% in Q1
‘UPHOLDING PEACE’: Taiwan’s foreign minister thanked the US Congress for using a ‘creative and effective way’ to deter Chinese military aggression toward the nation The US House of Representatives on Monday passed the Taiwan Conflict Deterrence Act, aimed at deterring Chinese aggression toward Taiwan by threatening to publish information about Chinese Communist Party (CCP) officials’ “illicit” financial assets if Beijing were to attack. The act would also “restrict financial services for certain immediate family of such officials,” the text of the legislation says. The bill was introduced in January last year by US representatives French Hill and Brad Sherman. After remarks from several members, it passed unanimously. “If China chooses to attack the free people of Taiwan, [the bill] requires the Treasury secretary to publish the illicit
A senior US military official yesterday warned his Chinese counterpart against Beijing’s “dangerous” moves in the South China Sea during the first talks of their kind between the commanders. Washington and Beijing remain at odds on issues from trade to the status of Taiwan and China’s increasingly assertive approach in disputed maritime regions, but they have sought to re-establish regular military-to-military talks in a bid to prevent flashpoint disputes from spinning out of control. Samuel Paparo, commander of the US Indo-Pacific Command, and Wu Yanan (吳亞男), head of the People’s Liberation Army (PLA) Southern Theater Command, talked via videoconference. Paparo “underscored the importance
CHINA POLICY: At the seventh US-EU Dialogue on China, the two sides issued strong support for Taiwan and condemned China’s actions in the South China Sea The US and EU issued a joint statement on Wednesday supporting Taiwan’s international participation, notably omitting the “one China” policy in a departure from previous similar statements, following high-level talks on China and the Indo-Pacific region. The statement also urged China to show restraint in the Taiwan Strait. US Deputy Secretary of State Kurt Campbell and European External Action Service Secretary-General Stefano Sannino cochaired the seventh US-EU Dialogue on China and the sixth US-EU Indo-Pacific Consultations from Monday to Tuesday. Since the Indo-Pacific consultations were launched in 2021, references to the “one China” policy have appeared in every statement apart from the
NO HUMAN ERROR: After the incident, the Coast Guard Administration said it would obtain uncrewed aerial vehicles and vessels to boost its detection capacity Authorities would improve border control to prevent unlawful entry into Taiwan’s waters and safeguard national security, the Mainland Affairs Council (MAC) said yesterday after a Chinese man reached the nation’s coast on an inflatable boat, saying he “defected to freedom.” The man was found on a rubber boat when he was about to set foot on Taiwan at the estuary of Houkeng River (後坑溪) near Taiping Borough (太平) in New Taipei City’s Linkou District (林口), authorities said. The Coast Guard Administration’s (CGA) northern branch said it received a report at 6:30am yesterday morning from the New Taipei City Fire Department about a