Wall Street showed some resilience on Friday, closing mixed even as oil prices settled at a new high and raised more concerns about inflation. The NASDAQ composite index fell to a four-month low on weakness in semiconductor stocks, and all three indexes finished the week lower.
With analysts warning that oil prices could pressure profits -- and Continental Airlines Inc coming out with drastically lower earnings estimates due to costlier jet fuel -- investors were faced with the task of adjusting their portfolios to the new economic realities. Oil prices climbed higher, with a barrel of light crude settling at a record US$56.72, up US$0.32, on the New York Mercantile Exchange.
"Even if we were to see a quick pullback in oil, I don't think that'll reverse the trend, and there are still some negative implications for the market," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati. "I think you'll start to see companies, like the airlines, fessing up to the fact that these oil prices are going to hurt."
The Dow Jones industrial average rose 3.32, or 0.03 percent, to 10,629.67. The Dow had fallen more than 69 points in late trading before recovering at the close.
Broader stock indicators lost ground. The NASDAQ composite index lost 8.63, or 0.43 percent, to 2,007.79, its worst finish since Nov. 3. The Standard & Poor's 500 index was down 0.62, or 0.05 percent, at 1,189.59.
Trading was very brisk as mutual funds tracking the S&P 500 adjusted their holdings. The index was rebalanced to more accurately reflect the number of shares of each company available in the market. It was also "triple witching day" on Wall Street, in which investors cash in options and futures contracts and offer new ones, which may have accounted for the rise in stock prices by the end of the day.
Rising oil prices plagued the markets all week, reaching a record close on Wednesday and again Friday, and posting an intraday high above US$57 per barrel on Thursday.
All three major indexes posted their second straight week of losses. For the week, the Dow fell 1.34 percent, the S&P was down 0.87 percent, and the NASDAQ lost 1.66 percent. The NASDAQ is down 7.7 percent for the year to date.
Bonds fell along with stocks Friday, with the yield on the 10-year Treasury note climbing to 4.51 percent, up from 4.46 percent late Thursday. The dollar gained ground against most major currencies, while gold prices fell.
The Russell 2000 index of smaller companies was down 2.96, or 0.46 percent, at 622.50.
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
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
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],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts