US stocks rose on Friday and capped off its strongest week since March after US Federal Reserve Chair Janet Yellen said an interest rate hike would likely be appropriate “in the coming months.”
Yellen’s is the most important voice in a chorus of policymakers recently suggesting that the US economy has improved enough to warrant tighter borrowing costs, with a growing number of investors now expecting a hike next month or in July.
While higher interest rates choke liquidity in stock markets, many investors see a potential interest rate hike as a vote of confidence that the struggling US economy is finding its legs.
“As we look at our place in the global economy, things just seem to be improving to a point where it certainly looks likely that June or July will be the next launching point,” said Paul Springmeyer, portfolio manager at the Private Client Reserve of US Bank.
“With the increased strength, we should get up off of those historically low levels where we are,” he said.
After Yellen’s speech, traders raised their expectations of a rate hike next month to 34 percent from 30 percent, according to CME Group.
The Fed next meets on June 14 and June 15.
Data on Friday showed US economic growth slowed in the first quarter, although not as sharply as initially thought.
All of the 10 major S&P sectors rose, with the telecom and financial indices leading the gainers.
The Dow Jones industrial average climbed 0.25 percent to end at 17,873.22 points and the S&P 500 gained 0.43 percent to 2,099.06.
The NASDAQ Composite Index added 0.65 percent to 4,933.51.
For the week, the S&P 500 rose 2.3 percent and the Dow added 2.1 percent, the best weekly performance for both since March.
The NASDAQ gained 3.4 percent for the week, its best weekly result since February.
For this year, the S&P 500 is up 2.7 percent.
Friday’s volume was muted as investors checked out ahead of a long weekend, with US stock markets closed tomorrow for the Memorial Day holiday.
Just 5.6 billion shares changed hands on US exchanges, well below the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Cybersecurity firm Palo Alto dropped 12.36 percent after a wider-than-expected quarterly loss.
GameStop fell 3.93 percent after the video-game retailer forecast lower-than-expected revenue and profit for the current quarter.
Financial stocks advanced, with Bank of America rising 1.2 percent and JPMorgan Chase and Goldman Sachs both up 0.6 percent.
US-listed Chinese stocks were another strong category, with Alibaba (阿里巴巴), rising 3.3 percent, Baidu (百度) 4.1 percent and JD.com (京東) 4.7 percent.
Google parent Alphabet climbed 1.2 percent after a jury ruled in a retrial that Google did not unfairly use parts of Oracle’s Java programming language in its Android smartphone operating system. The retrial stemmed from a 2012 case in which Google also had prevailed.
Oracle, which sought US$9 billion in damages, said there were grounds for an appeal. Oracle rose 0.3 percent.
FEI Co, which manufacturers high-tech microscopes, surged 14.3 percent following an announcement that it agreed to be acquired by Thermo Fisher Scientific for about US$4.2 billion. Thermo Fisher rose 0.6 percent.
Ulta Beauty leaped 9.1 percent after first-quarter net income shot up 37.3 percent to US$92 million and the cosmetics company pointed to “healthy” consumer demand for beauty products.
PLANNED OUT: The government is lifting sale and export restrictions on 60% of the 20 million masks made daily, but people can still make purchases using their NHI cards Twenty thousand boxes of 50 masks each would be on sale at FamilyMart convenience stores starting tomorrow, Taiwan FamilyMart Co Ltd (全家便利商店) said yesterday. A box of 50 masks would cost NT$249 for those with FamilyMart memberships and NT$299 for those without, with no limits placed on how many boxes a person can buy, the company said. Convenience store chain operator Hi-Life International Co Ltd (萊爾富) said that it would also start selling masks from tomorrow. It has yet to announce details about prices and quantity. Hypermarket chain operator Carrefour Taiwan (家樂福) said that it would start selling packs of five
Delta Electronics Inc (台達電), the nation’s leading power management solutions provider, has signed an agreement to acquire Canadian software firm Trihedral Engineering Ltd to bolster its smart production efforts, it said on Saturday. Delta said in a statement that it would acquire Trihedral for C$45 million (US$32.68 million) through its 100 percent-owned subsidiary Delta Electronics (Netherlands) BV. Trihedral specializes in supervisory control and data acquisition (SCADA) and industrial Internet of Things software, which would strengthen Delta’s hardware offerings in fast-growing areas such as automation, artificial intelligence and data analytics, it said. “The collection, monitoring and analyzing of data are critical to Delta’s two
From the customer’s perspective, car rental is a straightforward business. The only uncertainty is whether the hire company will charge you for the scratch they discover when you hand back the vehicle. Hertz Global Holdings Inc’s bankruptcy protection filing on Friday last week was a reminder that today even the simplest business models are underpinned by a lot more financial complexity than meets the eye. The proximate cause of Hertz’s demise was of course the sudden collapse in bookings caused by COVID-19 travel restrictions. The company’s monthly revenue last month fell 73 percent year-on-year, a shortfall that even the most resilient
BOOSTING BUYING: A source said that the idea of pre-ordering vouchers online is being considered, but the preliminary plan is for people to buy them at post offices A stimulus voucher program to be rolled out next month to boost consumption would be available not only to Taiwanese, but also foreign nationals and Chinese spouses who hold residency permits, a source familiar with the matter said yesterday. The government is fine-tuning the details of the program, which involves issuing vouchers for in-store purchases to revive buying amid the COVID-19 pandemic. During a radio interview on Monday last week, National Development Council (NDC) Minister Kung Ming-hsin (龔明鑫) said that the plan is to allow anyone, regardless of age or income level, to buy NT$3,000 (US$99.89) worth of vouchers for