Wall Street has moved within range of a new milestone of 12,000 for the Dow Jones blue chip index as investors grow more confident about a "soft landing" for the US economy and healthy corporate earnings.
But despite the upbeat sentiment among investors, some analysts say the market may need to pause or pull back in the short term to digest the strong gains of recent weeks, and will take a cue from corporate results.
In the week to Friday, the Dow Jones Industrial Average of 30 blue-chip stocks climbed 0.93 percent to end the week at a new all-time record of 11,960.51.
The broad-market Standard & Poor's 500 increased 1.18 percent on the week to 1,365.62 and the NASDAQ composite advanced 2.49 percent to 2,357.29.
Over the past week, the market was focused on third-quarter corporate results but managed to shrug off a disappointing set of results from aluminum giant Alcoa.
Alcoa's results were "bad news, but we knew that in the materials sector, there was a slowdown," Marc Pado at Cantor Fitzgerald said.
Hugh Johnson at Johnson Illington Advisors, said earnings will be another important focus for investors in the coming week but that the overall trend is positive.
"They're good so far," he said, noting that "74 percent of the companies of the S&P 500 that have already reported exceeded estimates."
"The numbers that came out continue to point to pretty steady growth," Johnson added.
A further drop in energy prices added to the cheer on Wall Street, with New York crude oil futures trading as low as US$57.22 -- marking its lowest point since Dec. 19 last year, and a 27-percent drop from its record high of US$78.40 in mid-July.
A good deal of the focus has been on the records set on Wall Street with the Dow hitting a series of records in the past two weeks after a six-year struggle to recover from the dot-com collapse.
"While crossing a 1,000 point threshold on that index is not a huge event from an economic perspective, it is an excellent barometer of investors' overall mood," said Fred Dickson, market strategist at DA Davidson.
"We have often said that the Dow is perhaps the most widespread barometer of the mood of the country encompassing factors that extend well beyond corporate America's earnings reports," he said.
Dickson said the rally "has placed enormous pressure on under-invested portfolio managers and individual investors to step up to the plate and hop on board what appears to be an important train moving rapidly out of the station."
But he and others said the market cannot continue to move straight up.
"While we remain positive toward the near-term prospects of the stock market, we remain well aware that even hard charging bull markets must pause occasionally to take necessary `relief' breaks," he said.
Al Goldman at AG Edwards said he remains concerned that "the uncertainty represented by the Nov. 7 midterm elections has yet to be discounted."
"If we get a normal pullback the odds on a year-end rally will increase. Our long-term opinion remains cautiously optimistic," he added.
Investors will focus in the coming week on results from Johnson and Johnson, Yahoo, General Motors, Apple, eBay, Intel, Google and Coca-Cola, among others. Economic reports include surveys on inflation and industrial production.
Bonds fell in the past week as money shifted into stocks. The yield on the 10-year Treasury bond rose to 4.806 percent from 4.696 percent a week earlier, while that on the 30-year bond increased to 4.938 percent from 4.837 percent.
Bond yields and prices move in opposite directions.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source