US stocks rose on optimism the ouster of Treasury Secretary Paul O'Neill and Larry Lindsey, the chief White House economic adviser, will pave the way for measures to boost equities and corporate earnings.
Financial shares such as Citigroup Inc led the advance, which sent the Dow Jones Industrial Average and Standard & Poor's 500 Index to their first gains in six days. Verizon Communications Inc and Philip Morris Cos. climbed as some investors bought stocks that pay dividends on speculation policy changes will reduce taxes on payouts.
PHOTO: AP PHOTO
Still, the Dow recorded its first weekly loss since October amid concern corporate profit growth is slowing. The S&P 500 and NASDAQ Composite Index declined for the first week in four.
With a new group of Bush administration economic advisers, "the likelihood is that the policies that will be adopted by this government will continue the recovery and let corporations enhance profitability," said Robert Goodman, senior economic adviser at Putnam Investments, which oversees US$250 billion in Boston.
The Dow climbed 22.49, or 0.3 percent, 8,645.77. The S&P 500 gained 5.68, or 0.6 percent, to 9,12.23, with financial, consumer and telecommunications shares contributing half the advance. The NASDAQ rose 11.69, or 0.8 percent, to 1,422.44. Qualcomm Inc led the advance after it boosted its forecast for phone-chip shipments.
For the week, the Dow fell 2.8 percent. Its last weekly loss was in the five days ended Oct. 4. The average's eight-week rally was its longest more than 4 1/2 years.
The S&P 500 declined 2.6 percent this week and the NASDAQ 3.8 percent.
Stocks rebounded Friday from initial declines triggered by an unexpected increase in unemployment. Indexes reached their lows for the day in the first 10 minutes of trading after a government report showed the economy unexpectedly lost jobs last month and the unemployment rate rose more than predicted.
Three stocks rose for every two that fell on the New York Stock Exchange while eight advanced for every seven declined on the NASDAQ Stock Market. Some 1.24 billion shares traded on the Big Board, 17 percent below the three-month daily average.
Indexes began climbing as investors speculated the overhaul in Washington would boost efforts to pass legislation that would help stock investors.
"It's expected that the new Treasury Secretary, whoever that is, will be certainly a proponent of tax cuts which would be good news for the economy, good news for stocks and maybe not quite as good news for the treasury market," said Prudential Securities economist Michelle Girard on Bloomberg TV.
Citigroup, the largest financial-services company, added US$0.42 to US$37.56. JP Morgan Chase & Co added US$0.82 to US$24.43.
Bank of America Corp climbed US$0.64 to US$68.24.
Putnam's Goodman said measures Bush may propose that could boost the stock market and companies' earnings include cutting taxes on dividends and making payouts to shareholders a deductible expense for corporations.
"It's real cash that you're letting them keep, rather than borrow," he said. "It makes equity financing more competitive with debt financing. It makes investing in dividend-paying companies more attractive."
Verizon and Philip Morris, which both pay dividends of at least 3 percent, were among the biggest gainers in the S&P 500.
Verizon, the largest local-phone company, added US$1.12 to US$40.19, while Philip Morris, the largest cigarette maker, climbed US$0.59 to US$39.95.
Qualcomm advanced US$1.90 to US$41.48. The owner of patents for cell phones used by 127 million people said it will ship at least 28 million phone chips this quarter, up from an earlier estimate of 25 million to 27 million. It also lifted its fiscal second- quarter forecast to 24 million to 27 million, up from more than 20 million.
Oracle Corp, rose US$0.59 to US$11.28. James Mendelson, a SoundView Technology Group analyst, said the company's fiscal second-quarter results will be at the high end of management's forecasts.
Rational Software Corp surged US$2.12 to US$10.29 after International Business Machines Corp. agreed to purchase the maker of software that automates the development of computer programs for US$2.1 billion, or US$10.50 a share.
Hewlett-Packard Co climbed US$0.57 to US$18.83. Salomon Smith Barney Inc. analyst Richard Gardner recommended clients buy shares of the No. 2 computer maker instead of IBM. He said Hewlett- Packard shares trade at the low end of its historical price-to-earnings range, while IBM shares sell at the high end of its range.
Gardner lowered IBM, the biggest computer maker, to "in-line" from "outperform." IBM dropped US$0.74 to US$82.32.
General Motors Corp and Walt Disney Co led a decline in consumer-related shares after the November jobs report. GM, the world's biggest automaker, fell US$0.70 to US$37.25. Disney, a theme park operator, slid US$0.47 to US$17.17.
The Labor Department said payrolls declined by 40,000 jobs last month, the biggest drop since February. Economists surveyed by Bloomberg had forecast an average increase of 36,000.
The jobless rate rose to 6 percent, the highest in seven months, up from 5.7 percent in October. The average in Bloomberg's survey was 5.8 percent.
The employment report dashed optimism that companies are slowing the pace of firings. Initial jobless claims fell to a 21-month low last week, and reports this week showing rising factory orders and faster growth in the service economy also boosted confidence that the economy was recovering.
The jobs report is "further evidence the economy is not out of the woods yet," said Franklin Morton, research director at Ariel Capital Management, which oversees about US$10 billion.
McDonald's Corp shed US$0.81 to US$17.97. McDonald's Holdings Co of Japan slashed its full-year earnings forecast by 91 percent. The unit, half-owned by the US company, cited a drop in customers and rising costs.
Forest Laboratories Inc tumbled US$9.43 to US$98.35. The drugmaker faces a delay of up to two years on its hypertension treatment because federal regulators asked the company to conduct more studies.
The Russell 2000 Index of smaller stocks climbed 2.27, or 0.6 percent, to 396.72. The Wilshire 5000 Total Market Index, the broadest measure of US shares, rose 51.14, or 0.6 percent, to 8,629.16. The market value of US stocks climbed by US$61.37 billion.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six