The Dow Jones Industrial Average rallied as a larger-than-expected drop in wholesale prices lifted optimism that the Federal Reserve will cut interest rates again to keep the economy from sliding into a recession.
Minnesota Mining & Manufacturing Co and Procter & Gamble Co led the surge, which boosted 25 of the Dow's 30 members. The average fell as much as 1 percent before rebounding to close with a gain of 117.69, or 1.1 percent, to 10,416.25. The Standard & Poor's 500 Index advanced 6.74, or 0.6 percent, to 1,190.17.
The report on wholesale prices shows "the economy was weaker than a lot of people expected, weak enough for the Fed to cut rates in two weeks," said Graham Tanaka, who manages US$150 million at Tanaka Capital Management.
The NASDAQ Composite Index fell for a sixth day, losing 6.85, or 0.4 percent, to 1,956.47. Siebel Systems Inc and Oracle Corp declined after a Goldman, Sachs & Co analyst reduced earnings estimates, citing slowing sales.
For the week, the NASDAQ dropped 5.3 percent, its third loss in four weeks. The S&P 500 fell 2 percent and the Dow 0.9 percent.
Three stocks rose for every two that fell on the New York Stock Exchange, while 10 declined for every nine that advanced on the NASDAQ Stock Market. Some 946 million shares traded on the Big Board, 21 percent below the three-month daily average.
Prices paid to US factories, farmers and other producers posted their biggest loss in almost eight years in July, fueled by declines in the cost of gasoline, computers and cars, the Labor Department report showed.
The producer price index fell 0.9 percent, while analysts surveyed by Bloomberg had forecast a drop of 0.3 percent.
Excluding food and energy, the index rose 0.2 percent, more than 0.1 gain analysts expected.
Fed policy-makers meet Aug. 21. The central bank has lowered the target rate for overnight lending between banks six times this year.
Procter & Gamble rose US$1.18 to US$71.87. UK antitrust regulators approved Procter & Gamble's proposed US$4.95 billion acquisition of Clairol, which will be the biggest purchase in the No. 1 US household products company's history. Bristol-Myers rose US$0.22 to US$56.70.
Johnson & Johnson rose US$1.16 to US$55.02. The drugmaker bought marketing rights to an experimental cancer-fighting medicine from Zeltia SA that has proved successful in two rounds of clinical studies.
3M, maker of products that range from Post-It Notes to circuit board, rose US$2.33 to US$109.85. Also boosting the Dow were Caterpillar Inc, up US$1.30 to US$53.65; and Merck & Co, which climbed US$1.21 to US$69.03.
Software shares led the NASDAQ's decline after Goldman, Sachs analyst Rick Sherlund said in a note to investors that the business is likely to worsen because companies haven't increased spending on software. "Estimating results has been like catching a falling knife," he wrote.
Siebel fell US$1.48 to US$28.29 and Oracle shed 83 cents to US$15.16.
Sherlund reduced his 2001 profit forecast for Siebel to US$0.56 from US$0.60 and his 2002 forecast to US$0.60 a share from US$0.70. He lowered his estimate for Oracle's 2002 earnings to US$0.46 from US$0.48.
BEA Systems Inc dropped US$1.72 to US$18.50. Credit Suisse First Boston analyst Wendell Laidley said revenue growth at the Internet- software maker may miss expectations for the rest of this year because of a decline in orders over the past five months. He now says the shares should reach US$29 in the next 12 months, down from US$49.
Companies involved in stem-cell research fell after rising yesterday before President George W. Bush said last night that he would limited federal funding of research using embryonic stem cells.
Geron Corp fell US$0.99 to US$13.95, StemCells Inc plunged US$1.61 to US$4.84 and Aastrom Biosciences Inc slumped US$0.43 to US$1.82.
Analysts and investors said the drop had little to do with Bush's decision and was instead a response to yesterday's speculator-driven gains. Geron yesterday rose 16 percent and StemCells surged 36 percent.
Rambus Inc rose US$0.88 to US$8.88 after a federal judge dismissed charges that the company committed fraud when it sought patents for some types of high-speed memory chips.
Pixar Inc rose US$2.24 to US$42.54. The animation company posted a second-quarter profit that beat the estimate of analysts polled by Thomson Financial/First Call.
Andrx Group jumped US$6.65 to US$66.85. The drugmaker's generic version of Prilosec, the world's best-selling prescription drug, moved closer to approval. AstraZeneca Plc, maker of Prilosec, said it wouldn't list two new patents for the ulcer medicine with the Food and Drug Administration, removing a hurdle to FDA approval of the Andrx product.
"This is clearly a huge win for Andrx," Credit Suisse First Boston analyst David Maris wrote in a note to clients.
United Therapeutics Corp soared US$5.19 to US$14. A US Food and Drug Administration advisory panel recommended approval of the company's first drug, for pulmonary hypertension. The FDA normally takes the advice of such expert panels.
The Russell 2000 Index of smaller stocks rose 1.35, or 0.3 percent, to 475.52. The Wilshire 5000 Total Market Index, the broadest measure of US shares, advanced 50.87, or 0.5 percent, to 10,994.46. The market value of US stocks climbed US$58.5 billion.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day