Wall Street bulls drove stocks to a third straight week of gains, blowing past worries about growing unrest in the Middle East and emerging inflation in the US.
Their enthusiasm faces a -holiday-shortened week packed with economic data on the depressed US housing market, as well as earnings reports from heavyweight companies. US equity and bond markets will be closed tomorrow in observance of the Presidents Day holiday.
“People have been calling for a pause for several weeks now and as it has not materialized, the complacency on the bullish side continues to grow,” Michael James of Wedbush Morgan Securities said. “We are certainly at risk for a meaningful pullback if something meaningful happens, but it is hard to predict.”
The Dow Jones Industrial Average of 30 blue-chip stocks climbed 0.95 percent over the week to finish on Friday at 12,391.25 points, its highest level since June 2008.
It was the 11th positive week for the bellwether Dow in the past 12 weeks, bringing gains for the period to 12 percent.
The NASDAQ Composite added 0.86 percent at 2,833.95, also the highest peak since June 2008.
The S&P 500 index advanced 1.03 percent to 1,343.01, a level last seen in October 2007.
“The theme remains the same as it has been for several months,” James said. “People are bullish — there are expectations that the US economy will continue to improve.”
James noted the market had developed “a self-fulfilling prophecy” because people have become conditioned not to sell as the market continues to go up.
On Wednesday, the US central bank threw red meat to the bulls in the form of improved economic forecasts.
The US Federal Reserve raised its growth projections for the US economy this year, but said the recovery was still too fragile and unemployment too high to lift its foot off the stimulus accelerator just yet.
Investors were also heartened by a robust manufacturing report from the Philadelphia Fed that took the sting off several disappointing indicators, notably last month’s retail sales.
By contrast, the US Department of Labor ‘s inflation reports for last month, showing annual inflation up 1.6 percent at the consumer level and 3.6 percent in the wholesale pipeline, set investors’ teeth on edge.
As the economy grapples with recovery from severe recession, investors worry that rising prices could curb crucial consumer spending and pinch businesses’ profit margins.
“The concern is real ... Whether the threat is real is a different story,” as inflation remains within the Fed’s comfort zone, Dan Greenhaus of Miller Tabak said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last