US stocks enter a new year this week on a cautious note, as investors face rising concerns about the economy and a raft of economic data, including the important monthly employment report.
Wall Street rapidly pulled the plug on the traditional year-end market rally.
Even during the Christmas holiday-shortened week, investors were beset by the demons that have haunted them for several months.
A persistent housing sector crisis and its related credit crunch was spotlighted by a plunge in new home sales.
A sluggish economy eked out a negligible increase in durable goods orders, and an unstable geopolitical environment was rattled anew by the murder of Pakistani opposition leader Benazir Bhutto.
In the last trading week of the year, which included only three and a half sessions, the blue-chip Dow Jones Industrial Average slid 0.63 percent lower to end Friday at 13,365.87 points.
The tech-rich NASDAQ composite fell 0.65 percent to 2,674.46 points and the broad-market Standard & Poor's 500 index lost 0.4 percent at 1,478.49 points.
The bond market attracted investors looking for safer havens.
The yield on the 10-year Treasury bond fell to 4.096 percent from 4.168 percent last Friday, and that of the 30-year Treasury bond slipped to 4.514 percent from 4.575 percent. Bond yields and prices move in opposite directions.
With tomorrow's session the last of this year, the Dow, which in the course of several months had crossed the psychological barriers of 13,000 points, then 14,000 points, has climbed a moderate 7.24 percent this year to date. The 30-company index is 800 points below its record high of 14,164.53 reached on Oct. 9.
The S&P 500, which tracks 500 companies and is considered a better gauge of the market, has added 4.24 percent.
The NASDAQ, benefiting from investors' continued interest in technology, jumped 10.73 percent, lifted by stars such as Google and Amazon.
"Considering the crude [oil] move of US$40 to nearly US$100 and the credit crisis, the market did exceptionally well, considering all that we had to deal with," said Marc Pado, an analyst at Cantor Fitzgerald.
Despite the shortened week ahead because of the New Year's Day holiday on Tuesday, investors will have a series of economic news to digest, including sales of existing homes tomorrow and the employment report for this month on Friday.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications. Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said. “We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an
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