As the idea of recession sinks in on Wall Street, traders are looking beyond the abyss in hope of a quick recovery for the US economy that could help avert a prolonged bear market.
Stocks posted solid gains over the past week even after US Federal Reserve Chairman Ben Bernanke finally uttered the “R” word and economic data appeared to confirm a significant downturn is underway.
The Dow Jones Industrial Average rallied 3.2 percent in the week to Friday to 12,609.42 and the Standard & Poor’s 500 broad-market index leapt 4.2 percent to 1,370.40.
The NASDAQ composite dominated by tech shares vaulted 4.9 percent to 2,370.98.
Wall Street has started off the second quarter on a strong note after a horrific start to the year. The main indexes remain lower for 2008 with the Dow off 4.9 percent, the NASDAQ 10.6 percent weaker and the S&P down 6.7 percent.
Stephen Auth, chief investment office at Federated Investors, said he believes the broad market can manage a gain of around 10 percent for the year even with the economy in recession.
“We expect that the recession will be short and shallow, ending in the second half of the year,” he said in a note to clients. “Our outlook for equities anticipates a return to reasonable economic growth later this year and into 2009.”
Bonds were mixed. The yield on the 10-year Treasury bond rose to 3.481 percent from 3.466 percent a week earlier.
The yield on the 30-year bond fell to 4.381 percent from 4.345 percent.
Bond yields and prices move in opposite directions.
In the coming week, the markets digest data on the US trade balance, and also will monitor the upcoming IMF economic outlook and meeting of G7 finance ministers.
National Taiwan University (NTU) yesterday said it disqualified a person from an entrance examination for using AI smart glasses to cheat, along with two others for making untruthful statements in their curriculum vitae. The three applicants were given null scores, Taiwan’s highest-ranked university said, calling on prospective students to be honest in the admissions process. NTU registrar Lee Hung-sen (李宏森) said that the cheating applicant wore a hat and thick-rimmed glasses to the second written exam for medical school, claiming that they felt cold. Suspicions were aroused when the applicant stared oddly at the test for long stretches while steadily bringing the paper
A magnitude 7.8 earthquake struck off the southern coast of Mindanao in the Philippines at 7:38am today, prompting the US Tsunami Warning System to issue an alert for neighboring countries, including Taiwan. The system issued a purple alert indicating a "tsunami threat." The potential threat zone includes Taiwan, the Philippines, Papua New Guinea, Yap and Palau. Philippine authorities were assessing the damage from the quake, with the office of civil defense seeking to verifying initial reports that 15 people had been killed and 129 injured in the region, mostly from falling debris. Arlene Hollero, disaster chief of Maasim town in the Philippines' Sarangani Province,
‘GRAY ZONE’ PRESSURE: Beijing’s activities are intended to create the deceitful impression that China has jurisdiction over the area around Taiwan, the CGA said Taiwan’s rights over its territorial waters and exclusive economic zone must not be violated by any country, the Mainland Affairs Council said yesterday, adding that it will not accept any unprovoked actions. The council issued the remarks in response to the China Coast Guard conducting maritime enforcement drills near eastern Taiwan and claiming to fully exercise China’s maritime administrative law enforcement authority. The Coast Guard Administration (CGA) has been closely monitoring the situation and is taking concrete steps to defend the nation’s sovereignty and secure its waters, the council said. China has no sovereign rights over the waters off eastern
Heavy rain is expected to affect parts of Taiwan this week, the Central Weather Administration (CWA) said yesterday as a meteorologist said the active part of the annual plum rain season has started. A stationary plum rain front and southwesterly winds would bring unstable weather and abundant moisture to Taiwan from today for about a week, with the heaviest rainfall forecast for tomorrow and Wednesday, the CWA said. The agency said western and northeastern Taiwan, and mountainous areas in the east and southeast, could expect showers or thunderstorms on those two days, with localized heavy rain possible. Other parts of
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