US stocks rebounded moderately on Friday as a stronger-than-expected retail sales report showed that higher oil prices aren't scaring consumers away from spending. Federal Reserve Chairman Alan Greenspan's positive comments on oil prices also encouraged investors, but the major indexes finished the week lower following sharp declines in the previous two sessions. \nWall Street has worried for months that soaring oil and gasoline prices would prompt consumers to spend less. But the Commerce Department reported that retail sales jumped 1.5 percent last month, much more than the 0.6 percent gain economists forecast. \nReassuring words from Greenspan, who said surging energy costs will have less of an impact on the economy than the energy crisis of the 1970s, cheered investors even as oil prices pushed toward US$55 per barrel. A barrel of light crude settled at US$54.93, up US$0.17, on the New York Mercantile Exchange. \n"The retail sales figures were particularly good news and could have a strong impact in overall GDP [gross domestic product] growth," said Joseph McAlinden, chief investment officer at Morgan Stanley Investment Management. "And certainly Greenspan's opinion on the state of the world has helped." \nThe Dow Jones industrial average rose 38.93, or 0.39 percent, to 9,933.38, regaining some ground after a 153-point drop over Wednesday and Thursday. \nBroader stock indicators were modestly higher. The Standard & Poor's 500 index was up 4.91, or 0.45 percent, at 1,108.20, and the technology-focused NASDAQ composite index gained 8.48, or 0.45 percent, to 1,911.50. \nDespite Friday's gains, stocks ended the week lower. The sharp climb in crude oil futures weighed heavily on the markets during the week, siphoning investor enthusiasm from stocks just as third-quarter earnings season got underway. For the week, the Dow lost 1.21 percent, the S&P 500 fell 1.24 percent and the NASDAQ was down 0.44 percent. \nInvestors worried about inflation received good news on Friday from the US Labor Department, which said wholesale prices, as measured by the Producer Price Index, rose just 0.1 percent last month. \nWhile the PPI was up from the 0.1 percent decline in August, the figure was small enough to reassure Wall Street that inflation would not be a major problem for the foreseeable future. \nConsumers seemed to share that sentiment, as high gas prices have driven down confidence in the economy. \nThe University of Michigan's consumer sentiment index fell to 87.5 this month, down sharply from the 94.2 figure last month and far lower than Wall Street's expectation of 94. \nAdvancing issues outnumbered decliners by nearly 5 to 2 on the New York Stock Exchange, where preliminary consolidated volume came to 2.03 billion shares, compared with 1.85 billion on Thursday. \nThe Russell 2000 index of smaller companies was up 4.54, or 0.8 percent, at 569.42.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a