Wall Street enters the first trading week of the year on a bullish note, but the market remains dogged by concerns on the timing of any interest rate hike by the Federal Reserve amid economy recovery.
The US central bank may shed some light on how the central bank will unwind its unconventional monetary policy that helped jolt the world’s largest economy from prolonged recession.
Fed Chairman Ben Bernanke is scheduled to speak to the American Economic Association forum in Atlanta tiday, while the minutes of the Dec. 15-16 Fed policy-making body meeting will be released on Wednesday.
They could provide more detailed clues on the Fed’s updated outlook for the economy and evolving plans for an eventual “exit” strategy from virtually zero interest rates, with the market flush with liquidity.
“We still expect the Fed to stick to its guns on the current low-interest policy through at least the first half of 2010,” said IHS Global Insight US economists Brian Bethune and Nigel Gault in a joint report.
They cited both inflation and output, which were “running below the Fed’s target,” as well as tight credit conditions and constrained demand for credit.
Wall Street stocks slumped at the close of a turbulent year on Thursday, after positive jobs data sparked concerns that interest rates may rise sooner than anticipated.
However, shares settled only slightly below their 52-week highs with strong gains for the year.
For the holiday-shortened week, the blue-chip Dow Jones Industrial Average lost 0.9 percent to 10,428.05, but gained 18.82 percent over the course of the year.
The technology-rich NASDAQ composite shed 0.7 percent for the week to 2,269.15 and the broad-market Standard & Poor’s 500 index retreated 1 percent to 1,115.10.
The NASDAQ index racked up the largest percentage gain for the year, wrapping up the year with a 43.9 percent jump, while the S&P 500 index jumped 23.5 percent.
Analysts are confident the market will continue its ascent, considering the 2.2 percent US economic growth chalked up in the July-September period — the first quarter of recovery after a year of contraction — as well as rising existing-home sales and durable-goods orders.
For the week, bonds were mixed. The yield on the 10-year Treasury bond rose to 3.843 percent from 3.807 percent a week earlier while that on the 30-year bond dipped to 4.641 percent from 4.687 percent. Bond yields and prices move in opposite directions.
Beijing’s continued provocations in the Taiwan Strait reveal its intention to unilaterally change the “status quo” in the area, the US Department of State said on Saturday, calling for a peaceful resolution to cross-strait issues. The Coast Guard Administration (CGA) reported that four China Coast Guard patrol vessels entered restricted and prohibited waters near Kinmen County on Friday and again on Saturday. A State Department spokesperson said that Washington was aware of the incidents, and urged all parties to exercise restraint and refrain from unilaterally changing the “status quo.” “Maintaining peace and stability across the Taiwan Strait is in line with our [the
EXTENDED RANGE: Hsiung Sheng missiles, 100 of which might be deployed by the end of the year, could reach Chinese command posts and airport runways, a source said A NT$16.9 billion (US$534.93 million) project to upgrade the military’s missile defense systems would be completed this year, allowing the deployment of at least 100 long-range Hsiung Sheng missiles and providing more deterrence against China, military sources said on Saturday. Hsiung Sheng missiles are an extended-range version of the Hsiung Feng IIE (HF-2E) surface-to-surface cruise missile, and are believed to have a range of up to 1,200km, which would allow them to hit targets well inside China. They went into mass production in 2022, the sources said. The project is part of a special budget for the Ministry of National Defense aimed at
READY TO WORK: Taiwan is eager to cooperate and is hopeful that like-minded states will continue to advocate for its inclusion in regional organizations, Lai said Maintaining the “status quo” in the Taiwan Strait, and peace and stability in the Indo-Pacific region must be a top priority, president-elect William Lai (賴清德) said yesterday after meeting with a delegation of US academics. Leaders of the G7, US President Joe Biden and other international heads of state have voiced concerns about the situation in the Strait, as stability in the region is necessary for a safe, peaceful and prosperous world, Lai said. The vice president, who is to be inaugurated in May, welcomed the delegation and thanked them for their support for Taiwan and issues concerning the Strait. The international community
COOPERATION: Two crewmembers from a Chinese fishing boat that sank off Kinmen were rescued, two were found dead and another two were still missing at press time The Coast Guard Administration (CGA) was yesterday working with Chinese rescuers to find two missing crewmembers from a Chinese fishing boat that sank southwest of Kinmen County yesterday, killing two crew. The joint operation managed to rescue two of the boat’s six crewmembers, but two were already dead when they were pulled from the water, the agency said in a statement. Rescuers are still searching for two others from the Min Long Yu 61222, a boat registered in China’s Fujian Province that capsized and sank 1.03 nautical miles (1.9km) southwest of Dongding Island (東碇), it added. CGA Director-General Chou Mei-wu (周美伍) told a