US stocks regained some stability in the past week, with investors hoping the Federal Reserve will deliver fresh interest rate cuts in days, but analysts warned that markets would remain volatile.
Global markets have slumped and rebounded sharply in the past week amid fears that the world's biggest economy could slip into US recession.
A surprise Fed rate cut of historic proportions on Tuesday helped calm the markets, and analysts said the central bank is poised to cut rates again at a looming policy meeting on Tuesday and Wednesday.
In the week to Friday, the benchmark blue-chip Dow Jones Industrial Average climbed 0.8 percent to close at 12,207.17. The Dow is down around almost 8 percent for the year to date, however.
The tech-rich NASDAQ composite lost 0.6 percent to 2,326.20, while the Standard & Poor's 500 index managed an increase of 0.4 percent to 1,330.61. Both indexes have also endured hefty losses since the start of this year.
"Market sentiment whipsawed between near panic and a more hopeful view. We still believe that investors should stay close to home going into the Fed meeting," analysts at Lehman Brothers wrote in a briefing note, referring to the past week's trading.
Analysts cautioned that the rollercoaster ride of recent weeks is probably not over just yet. News that a "rogue trader" at French banking giant Societe Generale lost around US$7 billion stoked renewed unease at week's end.
Wall Street has struggled to make headway so far this year amid a worsening US housing slump and related credit squeeze.
The large rate cut unleashed by the Fed on Tuesday appeared to soothe some investors, the central bank slashed its key federal funds rate by three quarters of a percentage point to 3.5 percent, but market participants believe fresh cuts are in store.
"We expect another 50 basis point cut to a 3 percent federal funds rate target on Wednesday," said Peter Kretzmer, a senior economist at Bank of America.
The Fed embarked on a rate-cutting mission in September as large banks began divulging hefty losses from ailing mortgage investments, triggering a credit crunch.
"Stresses in the financial markets remain high. The Fed will want to take further insurance against significant downside risks, especially in the next four months, as the fiscal stimulus is not expected to have an impact on growth until the end of the second quarter, at the earliest," said Patrick Newport, an economist at Global Insight.
Bond prices rose over the week as investors sought a safe haven from stocks.
The yield on the 10-year Treasury bond declined to 3.584 percent from 3.648 percent a week earlier, while that on the 30-year bond fell to 4.282 percent from 4.297 percent.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
RSS