With shaky conviction, Wall Street investors are starting to come out from their shell in anticipation of global credit squeeze easing and a skirting of a major US economic downturn.
Over the week to Friday, the Dow Jones Industrial Average gained 1.29 percent to 13,058.20. The blue-chip index has now clawed back most of its losses from a dismal start to the year and is down just 1.56 percent for the year.
The Standard & Poor’s 500 broad-market index advanced 1.15 percent on the week to 1,413.90, moving past a key resistance level of 1,400 and limiting its loss for the year to 3.7 percent.
The technology-laden NASDAQ composite rallied 2.23 percent for the week to 2,476.99.
In an action-packed week, investors learned that the US economy did not contract in the first quarter of this year, but expanded at a 0.6 percent pace, avoiding the kind of steep decline some had feared.
The US Federal Reserve meanwhile cut its base lending rate a quarter-point to 2 percent while giving what analysts said was a tentative signal it would not go lower barring a worsening economy.
Finally, data showed the US economy lost 20,000 jobs last month, significantly fewer than expected, in a sign that the labor market and overall economy may be holding up better than feared.
Linda Duessel at Federated Investors said a number of factors still are weighing on the stock market, including near-record energy costs and home prices that are falling at an alarming rate. Consumer confidence remains weak and inflation appears to be on the rise as well.
“For stocks to move up in earnest much from here, we probably will need a catalyst,” she said.
“One would be a lasting decline in oil prices sufficient to provide consumers with both the inclination and means to purchase discretionary items ... Tax rebates are another potential catalyst,” Duessel said.
Bonds held nearly steady in the past week. The yield on the 10-year Treasury bond dipped to 3.845 percent from 3.866 percent a week earlier and that on the 30-year bond eased to 4.565 percent from 4.589 percent.
Bond yields and prices move in opposite directions.
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TARGETED TEXTS: The center’s head said that visitor numbers at scenic spots were greater than expected and people did not do a very good job of social distancing The Central Epidemic Command Center (CECC) yesterday sent two warning text messages to urge people to practice social distancing, especially by avoiding crowded scenic areas. The two messages were sent at 11:55am on the third day of the four-day Tomb Sweeping Day weekend, reminding people about social distancing and hand hygiene to help prevent COVID-19 infection. “When visiting crowded scenic spots during the Tomb Sweeping Day weekend, please keep a social distance of at least 1.5m indoors and 1m outdoors, wear a mask and wash your hands frequently. Please wear a mask and seek immediate medical attention if you are feeling ill
The US National Security Council yesterday thanked Taiwan for its support amid the COVID-19 pandemic following President Tsai Ing-wen’s (蔡英文) announcement that Taiwan would donate 10 million masks to hard-hit countries. The donation includes 2 million masks to the US on top of the weekly 100,000 announced previously; 7 million to Europe; and 1 million to diplomatic allies, on top of 1 million Taiwan procured for allies from their neighboring countries, the Ministry of Foreign Affairs said on Wednesday. After European Commission President Ursula von der Leyen expressed appreciation for the donations, the US body yesterday wrote its thanks on Twitter. “We