US stocks were mixed over the past week, with the Dow Jones Industrial Average posting its first weekly gain since late April amid hopes Europe would tackle its debt crisis and some positive domestic economic data.
The blue-chip Dow rose 0.44 percent in the week to Friday to 12,004.36, reversing course after it had fallen for six straight weeks.
The broader Standard & Poor’s 500 index ended where it had started, rising by less than a point to 1,271.50. The tech-heavy NASDAQ fared the worst, falling 1.03 percent to 2,616.48.
Trading was volatile, with the Dow rallying 1.03 percent on Tuesday before collapsing 1.49 percent on Wednesday.
Much of the choppiness was because of the situation in Greece, where protests challenged a wobbly government seeking to impose unpopular austerity measures as European leaders struggled to defuse the country’s debt crisis.
By Friday, Greece had gotten a new finance minister and Germany and France had appeared to unite around the need to stop the Greek contagion from infecting Europe’s major banks, causing markets to perk up again.
“In our view the risk is now diminished since the large powers in Europe have reached an agreement in principle,” said David Kotok, chairman and chief investment officer of Cumberland Advisors.
Investors were also heartened by several reports showing that the US economy was not faring as badly as many had feared.
Reports showed that retail sales fell less steeply last month than expected, while housing starts rebounded 3.5 percent.
The index of leading economic indicators rose 0.8 percent last month, the first gain in 10 months, according to a monthly report from the Conference Board.
“Those things combined have helped to renew a little bit of hope that the soft patch is indeed a soft patch and not something more ominous,” said Gina Martin, equity strategist at Wells Fargo Securities.
Energy stocks fell along with the price of oil, with New York futures for light, sweet crude dropping about US$6 to close at US$93.01 on Friday. ExxonMobil was down 1.2 percent for the week and Chevron was down 0.9 percent.
Telecoms were up, with AT&T gaining 1.6 percent and Verizon rising 0.8 percent for the week.
A big disappointment was Pandora, an Internet radio company which held a much-hyped initial public offering (IPO) on Wednesday, debuting at US$16 a share. After briefly surging to US$26 in early trading, Pandora tanked, closing at US$13.40 on Friday, down more than 16 percent from its IPO price.
The reversal of fortune for the Dow may have just been the market naturally bottoming out after its lengthy slump, some analysts said.
“One has the impression that the people who wanted to sell have already sold,” Meeschaert Capital Markets president Gregori Volokhine said.
Next week, investors will be eagerly anticipating whether the Federal Open Markets Committee (FOMC) — the body within the US Federal Reserve that sets interest rates — decides to launch another round of economic stimulus.
The FOMC will meet on Tuesday and Wednesday and Federal Reserve Chairman Ben Bernanke will speak at a press conference on Wednesday.
“It looks like the Fed is going to dominate attention next week,” Martin said. “Who knows what they are going to pull out of their hat? Sometimes they do surprise.”
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
COLLABORATION: The operations center shows the close partnership between Taiwan and Japan in the field of semiconductors, Minister of Economic Affairs J.W. Kuo said Tokyo Electron Ltd, Asia’s biggest semiconductor equipment supplier, yesterday launched a NT$2 billion (US$61.5 million) operations center in Tainan as it aims to expand capacity and meet growing demand. Its new Taiwan Operations Center is expected to help customers release their products faster, boost production efficiency and shorten equipment repair time in a cost-effective way, the company said. The center is about a five-minute drive from the factories of its major customers such as Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 3-nanometer and 2-nanometer fabs. The operations center would have about 1,000 employees when it is fully utilized, the company
RSS