October 19th, 2012
Closing the Week with Forexpros
U.S. stocks dropped on news home sales were off last month, while quarterly earnings continued to disappoint. At the close of U.S. trading, the Dow Jones Industrial Average fell 1.52%, the S&P 500 index was down 1.66%, while the Nasdaq Composite index was down 2.19%.
In a report, the National Association of Realtors said that September home sales fell 1.7% to 4.75 million from 4.83 million in August, whose figure was revised up from 4.82 million.
Analysts had expected existing home sales to fall to 4.75 million last month. While in line with expectations, the report stoked bearish sentiments on Wall Street and sent investors chasing the ditching stocks and stocking up on safe-haven dollar positions.
Earnings fueled the selloff as well.
Microsoft reported late Thursday that its third-quarter net income fell 22% to USD4.47 billion, which missed expectations, while revenue fell 8% on year to USD16.01 billion.
General Electric, meanwhile, reported earlier that its third-quarter net income rose 8% to USD3.49 billion, while revenue rose 3% to USD36.35, missing market expectations.
Fast-food giant McDonald's quarterly earnings fell 3.3% to USD1.46 billion, while revenue was basically flat at USD7.2 billion
Internet search giant Google released earnings earlier than planned late Thursday, which sparked confusion, and the company missed estimates as well. The company reported revenue of USD14.10 billion, up 45% on year, though net income came to USD2.18 billion, down 20% on year and below expectations.
Elsewhere, stocks stayed low on news Spain won't rush to seek rescue financing. Spanish Prime Minister Mariano Rajoy said his government felt it was under no pressure to seek a bailout.
Requesting financial assistance would allow Spain to tap the European Central Bank's bond-buying program, which would lower yields in Spanish government debt auctions and ease credit conditions in the country.
Leading Dow Jones Industrial Average performers included Home Depot, up 0.13%, Bank of America, down 0.32%, and Boeing, down 0.39%.
The Dow Jones Industrial Average's worst performers included McDonald's, down 4.46%, General Electric, down 3.46%, and Caterpillar, down 3.17%.
European indices, meanwhile, finished lower.
After the close of European trade, the EURO STOXX 50 fell 1.24%, France's CAC 40 fell 0.87% as well, while Germany's DAX 30 finished down 0.76%. Meanwhile, in the U.K. the FTSE 100 fell 0.35%.
Gold prices dropped in U.S. trading on Friday after investors stocked up on the precious metal's hedge, the dollar, in wake of soft housing data and a lack of direction on Spain and its plans to request a bailout or not.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were down 1.21% at USD1,723.65 a troy ounce, up from a session low of USD1,716.95 and down from a high of USD1,744.25 a troy ounce.
Gold futures were likely to test support at USD1,716.95 a troy ounce, the earlier low, and resistance at USD1,744.25, the earlier high. A risk-off trading session sent gold falling.
Elsewhere on the Comex, silver for December delivery was down 2.21% and trading at USD32.142 a troy ounce, while copper for December delivery was down 2.84% and trading at USD3.637 a pound.
Crude oil futures dropped in U.S. trading on Friday after industry data revealed existing homes sales declined in the U.S. last month.
Weak corporate earnings pushed oil prices down also, fueling concerns that a sluggish U.S. economy will need less fuels and energy to operate.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at USD90.83 a barrel on Friday, down 1.84%, off from a session high of USD93.49 and up from an earlier session low of USD90.39.
Investors shrugged off production snags involving the Keystone pipeline and in the North Sea.
On the ICE Futures Exchange, Brent oil futures for December delivery were down 1.43% and trading at USD110.81 a barrel, up USD19.98 from its U.S. counterpart.
The dollar rose against most major currencies on Friday as investors sought safety in the liquid U.S. currency after soft housing data and weak third-quarter earnings hit the wire earlier.
In U.S. trading on Friday, EUR/USD was down 0.35% at 1.3021.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.20% at 1.6013.
The dollar was up slightly against the yen, with USD/JPY trading up 0.02% at 79.29 and up against the Swiss franc, with USD/CHF trading up 0.40% at 0.9284.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD trading up 0.83% at 0.9934, AUD/USD down 0.36% at 1.0329 and NZD/USD trading down 0.31% at 0.8159.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.35% at 79.69.
The dollar rose against the yen on Friday as investors opted to hole up in safe-haven dollar positions.
In U.S. trading on Friday, USD/JPY was trading at 79.30, up 0.03%, up from a session low of 79.14 and off a high of 79.43. The pair was likely to find support at 79.14, the earlier low, and resistance at 79.43, the earlier high.