Wall Street ended its weekly trade with sharp losses as fears of a second-dip recession struck traders’ hearts after negative data suggested a bleak outlook for the world’s biggest economy.
Friday’s trade locked four days of straight losses fueled by the US Federal Reserve’s decision on Tuesday to revive crisis-era stimulus spending to prop up the ailing US economy, whose recovery, it warned, was slowing down.
In what was the worst trading week in six weeks, the Dow Jones Industrial Average lost 3.29 percent to 10,303.15, while the technology-rich NASDAQ composite index shed 5.02 percent to 2,173.48.
The broader S&P 500 index dropped 3.78 percent to 1.079.25.
The Federal Open Market Committee (FOMC) said on Tuesday that “the pace of economic recovery is likely to be more modest in the near term than had been anticipated.”
The Fed also said it would maintain its historically low interest rates between zero and 0.25 percent, but FOMC member Thomas Hoenig warned on Friday that current interest rate levels were “a dangerous gamble.”
The bank had battled the worst recession in a generation by buying up US debt, mortgage-backed securities and other financial products to lubricate markets.
The grim outlook was deepened by reports showing an unexpected rise in weekly jobless claims and that the US trade gap had widened sharply in June to its highest level in 20 months.
Figures suggesting a slowdown in the Chinese economy further compounded fears about the pace of the global recovery from the worst recession in decades.
Positive earnings reports from entertainment giant Walt Disney and department store chains Macy’s and Kohl’s failed to improve gloomy sentiments on Wall Street.
Shares in Cisco Systems took a heavy beating, pulling the NASDAQ down, as it lost more than 11 percent over the past week alone, after the Internet communications giant reported a disappointing profit and issued a cautious forecast.
“Early in the week, the market was hit by a one-two punch of a gloomier than expected FOMC report as well as weaker than expected data from China,” said Sam Stovall, an analyst at Standard and Poor’s. “In general, people are worried that the macro economic data is now overtaking the euphoria that we had gotten from second quarter earnings.”
Next week is likely to continue the low-volume trade with the monthly producer price index and industrial production reports set to show a timid improvement from the previous month, Stovall said.
Eyes will also be focused on the housing market with the release of the housing market index tomorrow and the housing starts reports on Tuesday, as investors seek to feel the market pulse.
“We’re basically scratching our heads ... but I would tend to say that economic reports next week will probably be more encouraging than the other way around,” Stovall said.
Furthermore, several companies will release their quarterly results, including the world’s largest retailer Walmart and PC manufacturer Dell, which seeks to recover from a volatile week affected by low forecasts in the global computer market.
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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