A prominent investor, Hindenburg Research, published a report in August that accused the company of accounting red flags and other issues, which Supermicro CEO Charles Liang later said contained false or inaccurate statements.
In stock markets overseas, indexes were more jubilant on hopes for more moves by China to prop up the world’s second-largest economy. The country’s powerful Politburo on Thursday called for intensified efforts as China tries to meet its goals for economic growth, according to the official Xinhua News Agency.
That follows a raft of announcements earlier in the week by the country’s central bank that had also sent global markets jumping. China’s economic growth has been flagging, with particular troubles in its real-estate industry, and Chinese officials appear to be making a more coordinated effort to boost it following earlier piecemeal attempts.
In the United States, meanwhile, more encouraging news came after a round of reports on Thursday suggested the world’s largest economy may be doing better than expected.
Fewer US workers applied for unemployment benefits last week in the latest signal that layoffs remain relatively low across the economy. A separate report said the overall US economy grew at a 3 per cent annual rate during the spring, as previously estimated. That’s a solid rate.
The hope on Wall Street is for a form of financial nirvana where the US economy’s growth can hold steady and keep profits for companies humming while the Federal Reserve continues to lower interest rates.
The Fed last week made a drastic turn in how it sets interest rates. It’s now cutting them to make things easier for the US economy after keeping rates high for years in hopes of extinguishing high inflation. Lower rates not only make it less expensive to borrow money to buy a house, a car or things on credit cards, they can also give a boost to prices for all kinds of investments.
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The fear is that the job market could weaken further as the cumulative effects of all the Fed’s past hikes to interest rates show themselves. The Fed kept its main interest rate at a two-decade high for more than a year in hopes of slowing the US economy enough to stifle inflation. US employers have already begun to slow their hiring.
When they cut their main interest rate by an unusually large half of a percentage point last week, Fed officials also suggested they may cut the federal funds rate by another half of a percentage point this year.
Many traders are betting on that big of a cut at the Fed’s next meeting alone in November, with another possible cut in December. If economic reports continue to come in stronger than expected, the Fed may not end up cutting as much as investors expect.
In the bond market, the yield on the 10-year Treasury remained at 3.79 per cent from late Wednesday. The two-year yield, which more closely follows expectations for what the Federal Reserve will do with short-term interest rates, rose to 3.61 per cent from 3.56 per cent.
In stock markets abroad, indexes climbed 2.3 per cent in France and 1.7 per cent in Germany.
AP
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