As US traders finished the last full week of business before Thanksgiving, Wall Street was feeling grateful for fresh records, central banks stimulus and big corporate mergers.
The Dow Jones Industrial Average rose 175.32 points (0.99 percent) to 17,810.06, while the S&P 500 gained 23.68 (1.16 percent) to 2,063.50 to both end the week at all-time highs as the tech-rich NASDAQ Composite Index added 24.43 (0.52 percent) to finish on 4,712.97.
By far the strongest day of trade was Friday, when central bank moves lifted global stock markets. The People’s Bank of China unexpectedly cut benchmark interest rates for the first time in more than two years, while European Central Bank President Mario Draghi also lifted hopes for more stimulus, saying it would act “without any undue delay” to address deflation.
The news constituted the latest evidence of the staying power of central bank largesse.
“Investors have been saying: ‘I would like more please,’ and central banks in Europe and China have delivered,” Cornerstone Wealth Management chief investment officer Alan Skrainka said. “It’s just the prescription the doctor ordered.”
Friday also demonstrated the positive potential of activist investors on individual stocks following three big activist wins: Dow Chemical Co reached a compromise with Third Point Management’s Daniel Loeb to appoint four independent directors, ending the threat of a proxy fight. Hours earlier, Sotheby’s, another Loeb target, said it would replace chief executive William Ruprecht, whom Loeb had criticized.
Also, Hertz Global Holdings Corp — a target of veteran activist Carl Icahn — tapped former United Airlines chief operating officer John Tague as its new chief executive with the blessing of three board members picked by Icahn.
Shares of Dow, Sotheby’s and Hertz all rose sharply following the announcements.
Major buyouts in the energy and pharmaceutical sectors meanwhile underscored that mega-merger fever is alive and well on Wall Street.
In rapid succession on Monday, pharmaceutical giant Actavis PLC said it would pay US$66 billion for Allergan Inc, which makes wrinkle-eraser Botox, while oil field services company Halliburton said it would take over rival Baker Hughes Inc for US$34.6 billion.
Mergers and acquisitions around the world so far this year have hit US$3.16 trillion, according to Dealogic PLC, the highest level since the record year of 2007. Major drivers of deals include cheap financing and a desire of companies to move beyond their core functions to grow.
Investors were also cheered by a generally positive batch of earnings results from leading retailers ahead of the key holiday shopping period.
Good earnings reports came from retailers in kitchen equipment (Williams-Sonoma Inc), office goods (Staples Inc), electronics (Best Buy Co Inc) and home improvement (Lowe’s Companies Inc). Department store Target Corp also bested expectations.
Clothing chains Gap Inc and Urban Outfitters Inc disappointed, while electronics vendor Best Buy warned of heavy discounting this season that could stifle profits.
Still, Wunderlich Securities chief market strategist Art Hogan said the results “very encouraging” on the whole and reflect the economic tailwinds of lower energy costs and an improved US labor market.
Markets next week will get a fresh sense on consumer sentiment when the Conference Board Inc releases its reading of consumer confidence for this month. Other data in the holiday-shortened week include the second estimate for third-quarter economic growth and durable goods orders for last month.
There will also be earnings reports from Tiffany & Co and Hewlett-Packard Co.
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
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],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained