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Investing.com Weekly Wrap-Up 29 March 2013

March 29th, 2013
in contributors

by Investing.com Staff, Investing.com

U.S. stocks gain on GDP data; Dow ends up 0.36%

U.S. stocks finished higher on Thursday after investors digested and then applauded investing.com-logofourth-quarter gross domestic product figures.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.36%, the S&P 500 index ended up 0.41%, while the Nasdaq Composite index gained 0.34%.  U.S. markets were closed on Friday.

Follow up:

The U.S. Commerce Department reported earlier that the country's gross domestic product expanded by 0.4% in the fourth quarter of last year, missing market forecasts for a 0.5% expansion.

Stocks rose on the figure, however, even though the growth rate was the slowest since the first quarter of 2011, as the number did outpace initial estimates for growth of 0.1%.

Elsewhere, the U.S. Labor Department reported that the number of people filing for initial jobless claims rose by 16,000 to 357,000 last week, defying market calls for a drop of 1,000 to 340,000.

The jobless data capped gains in U.S. equities markets, as did concerns that profit-taking may mark the arrival of the second quarter on Monday.

Stock indices repeatedly broke records recently due to hopes for a more sustained U.S. recovery and also due to better-than-expected earnings reports.

Leading Dow Jones Industrial Average performers included IBM, up 1.19%, Hewlett-Packard, up 1.15%, and UnitedHealth Group, up 1.06%.

The Dow Jones Industrial Average's worst performers included Chevron, down 1.17%, JPMorgan Chase, down 0.61%, and Exxon Mobil, down 0.59%.

Asian stocks mixed with Australia closed; Nikkei down 0.02%

Asian equities are mixed in afternoon trading amid a lethargic session that is low on risk appetite ahead of a holiday weekend. Australian and U.S. markets are closed today in observance of the Good Friday holiday.

In Asian trading Friday, Japan’s Nikkei 225 fell 0.02% after Japan’s Statistics Bureau said that Japanese household spending fell to a seasonally adjusted 0.8% in February from 2.4% in January. Analysts had expected Japanese household spending to fall to 0.2% last month.

The Statistics Bureau also said Japan’s unemployment rose slightly last month to 4.3% from 4.2%. Analysts expected the number to be unchanged. Japan’s national core CPI fell to a seasonally adjusted -0.3% in February from -0.2% in January, according to the Statistics Bureau. Analysts expected the core CPI to fall to -0.4% last month.

Tokyo’s core CPI rose to -0.5% in February from -0.6% in the prior month, topping the expectation that the number would remain unchanged, according to the Statistics Bureau. Japan’s Ministry of Economy, Trade and Industry said that industrial production fell to a seasonally adjusted -0.1% in February from 0.3% in January. Analysts expected a February reading of 2.6%.

Hong Kong’s Hang Seng fell 0.74% while the Shanghai Composite rose 0.30%. Shanghai shares rebounded after falling the most in three weeks on Thursday after bank stocks tumble. Chinese regulators announced they will turn up scrutiny of opaque wealth management products sold by Chinese banks.

New Zealand’s NZSE 50 rose 0.24% a day after official data showed that building consents in New Zealand rose 1.9% in February, after a 0.2% decline the previous month. Action in NZD/USD can also be described as lethargic today.

South Korea’s Kospi gained 0.68% after the Korean National Statistical Office said that South Korean industrial production fell to a seasonally adjusted annual rate of -9.3% in February from 7.6% in January. The January number was revised up from 7.3%. Analysts expected South Korean industrial production to fall to -5% last month.

Singapore’s Straits Times Index is down 0.15%. S&P 500 futures are higher by 0.05% a day after the benchmark index touched a new record high.

European stocks push higher as Cyprus, Italy dominate; Dax up 0.54%

European stocks pushed higher on Thursday, although investors remained cautious as Cyprus banks were to reopen later in the day, while concerns over political deadlock in Italy persisted.

During European afternoon trade, the EURO STOXX 50 advanced 0.73%, France’s CAC 40 gained 0.61%, while Germany’s DAX 30 climbed 0.54%.   European markets were closed on Friday.

Investors remained cautious, as banks in Cyprus re-opened for the first time in almost two weeks, with capital controls in place to prevent a run on banks.

Cypriots will not be allowed to withdraw more than 300 euros a day, cannot cash checks, and cannot take more than 3,000 euros when traveling abroad.

Meanwhile, in Italy, doubts continued over whether a stable coalition government could be formed, fuelling concerns that the country may have to go back to the polls.

Financial stocks extended gains, as shares in French lenders Societe Generale and BNP Paribas rallied 2.08% and 2.14%, while Germany's Deutsche Bank and Commerzbank added 1.71% and 0.09%.

Among peripheral lenders, Italian banks Intesa Sanpaolo and Unicredit surged 2.29% and 3.16% respectively, while Spain's Banco Santander and BBVA rose 0.38% and 0.74%.

Elsewhere, Dutch cable operator Ziggo saw shares soar 11.25%, following reports Liberty Global bought a 12.65% stake in the company.

In London, FTSE 100 advanced 0.80%, as U.K. lenders tracked their European counterparts higher, while data showed that U.K. service output rose 0.3% in January, the biggest rise since August, easing concerns over the threat of a triple-dip recession.

Shares in Lloyds Banking climbed 0.68% and HSBC Holdings jumped 1.43%, while Barlays rallied 2.03%. The Royal Bank of Scotland underperformed on the other hand, slipping 0.23%.

Meanwhile, mining stocks also remained on the upside, as Rio Tinto rose 0.34% and rival Evraz surged 1.82%, while copper producer Xstrata gained 0.49%.

On the downside, ICAP plummeted 2.53%%, after the world’s largest broker of transactions between banks said profit will slip this year.

Forex

The U.S. dollar traded largely lower against most major currencies on Thursday after banks began to reopen in Cyprus amid relative calm after a near 2-week holiday, which fueled relief-buying of the euro and other higher-yielding currencies.

Slightly softer-than-expected gross domestic product figures out of the U.S. sent the dollar sliding as well.

In U.S. trading on Thursday, EUR/USD was up 0.37% at 1.2826.

Banks in Cyprus reopened with strict capital controls in place, though relief the island nation avoided a messy default and banking collapse allowed the euro to rise.

Cypriot financial institutions closed on March 16 amid fears of a bank run while bailout talks took place, though calmness held throughout the day as banks opened their doors.

U.S. growth rates dampened dollar demand as well.

The U.S. Commerce Department reported earlier that the country's gross domestic product expanded by 0.4% in the fourth quarter of last year, missing market forecasts for a 0.5% expansion, which watered down hopes the Federal Reserve may be closer to winding down monetary stimulus programs.

The growth rate was the slowest since the first quarter of 2011, though the figure did outpace initial estimates for growth of 0.1%.

Elsewhere, the U.S. Labor Department reported that the number of people filing for initial jobless claims rose by 16,000 to 357,000 last week, defying market calls for a drop of 1,000 to 340,000.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.41% at 1.5190.

The U.S. dollar is trading slightly lower against the Japanese yen Friday in Asia as both currencies are seen reacting to a deluge of data points over the past 24 hours.

In Asian trading Friday, USD/JPY fell 0.01% to 94.16. The pair was likely to find support at 93.85, Tuesday’s low and resistance at 95.73, the high of March 19.

Earlier today, Japan’s Statistics Bureau said that Japanese household spending fell to a seasonally adjusted 0.8% in February from 2.4% in January. Analysts had expected Japanese household spending to fall to 0.2% last month.

The Statistics Bureau also said Japan’s unemployment rose slightly last month to 4.3% from 4.2%. Analysts expected the number to be unchanged. Japan’s national core CPI fell to a seasonally adjusted -0.3% in February from -0.2% in January, according to the Statistics Bureau. Analysts expected the core CPI to fall to -0.4% last month.

Tokyo’s core CPI rose to -0.5% in February from -0.6% in the prior month, topping the expectation that the number would remain unchanged, according to the Statistics Bureau.

Japan’s Ministry of Economy, Trade and Industry said that industrial production fell to a seasonally adjusted -0.1% in February from 0.3% in January. Analysts expected a February reading of 2.6%.

Those data points came on the heels of a few out of the U.S. on Thursday. In U.S. economic news, the Commerce Department revised its estimate of U.S. fourth-quarter GDP growth to 0.4% from 0.1%. Thursday’s number was the third of three estimates for the final quarter of 2012. The Labor Department said initial claims for jobless benefits rose by 16,000 to 357,000 last week.

The March reading of the Chicago purchasing managers index fell 4.4% to 52.4%, well below the reading of 56.4% economists expected. Readings above 50% indicate expansion.

Meanwhile, EUR/JPY rose 0.02% to 120.70. The pair sought to test support at 119.75, the earlier low, and resistance at 121.87, Wednesday's high.

The New Zealand dollar is trading modestly lower against its U.S. rival during Friday’s Asian session as traders dial back risk a bit ahead of a holiday weekend.

In Asian trading Friday, NZD/USD is lower by 0.02% at 0.8368. The pair was likely to find support at 0.8340, the low of March 26 and resistance at 0.8418, the high of February 25.

The lethargic action in the pair comes as Australian and U.S. markets are closed today and follows spate of data points released by both countries over the past two days.

On Thursday in New Zealand, official data showed that building consents in New Zealand rose 1.9% in February, after a 0.2% decline the previous month.

The U.S. dollar traded lower against nearly all of its major rivals during Friday’s Asian session following some tepid U.S. economic data points delivered Thursday. That along with the combination of the S&P 500 touching a new record high weighed on the greenback.

Gold

Gold futures traded slightly higher during Friday’s Asian session, but the yellow is metal is still likely to post a first-quarter decline.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery rose 0.05% to USD1,597.15 per troy ounce in Asian trading Friday after settling down 0.72% at USD1,595.65 a troy ounce in U.S. trading on Thursday.

Gold futures were likely to test support USD1,591.95 a troy ounce, Wednesday's low, and resistance at USD1,608.85, Wednesday's high. A batch of conflicting U.S. data points released Thursday is seen as weighing on gold.

In U.S. economic news, the Commerce Department revised its estimate of U.S. fourth-quarter GDP growth to 0.4% from 0.1%. Today’s number was the third of three estimates for the final quarter of 2012. The Labor Department said initial claims for jobless benefits rose by 16,000 to 357,000 last week.

The March reading of the Chicago purchasing managers index fell 4.4% to 52.4%, well below the reading of 56.4% economists expected. Readings above 50% indicate expansion.

With U.S. markets closed today in observance of the Good Friday holiday, New York-traded gold finished the first quarter with a loss of nearly 5%. Gold bulls can find some solace in the fact the yellow metal will finish with a gain for the month of March. In fact March was the best one-month run for gold since July 2012.

Gold reached a 90-day high last week of over USD1,616 per ounce on heightened fears about the situation in Cyprus, but the yellow metal has since fallen victim to some profit taking as Cyprus cut a deal to avoid potential bankruptcy.

Elsewhere, silver for May delivery rose 0.11% to USD28.305 per ounce while copper for May delivery added 0.01% to USD3.403 per ounce.

Oil

Oil futures are trading slightly higher during Friday’s Asian session as traders in the region digest a mixed batch of U.S. economic data released Thursday.

On the New York Mercantile Exchange, light, sweet crude futures rose 0.07% to USD97.20 per barrel in Asian trading Friday after settling up 0.22% at USD96.79 a barrel on Thursday in New York.

With U.S. markets closed today (Friday), traders now know that oil futures closed higher for the week there by 3.8% while rising 5.6% during March. New York-traded crude finished the first quarter with a gain of 5.8%.

Elsewhere, BP, Europe’s second-largest oil company, said it will partner with U.S. oil giants Chevron and ConocoPhillips on a new exploration project in the Shetland Islands, north of Scotland. BP thinks it can pull about 1 billion barrels from the Clair Ridge in the region. Chevron and ConocoPhillips are the second and third-largest U.S. oil companies, respectively.

Lebanon announced 52 global oil companies are bidding for win licenses for offshore oil and gas work in that country. The companies include Chevron, Exxon Mobil and Royal Dutch Shell.

Meanwhile, Brent crude futures for May delivery fell 0.18% to USD109.83 per barrel on the ICE Futures Exchange.

Natural Gas


Natural gas futures dropped in afternoon trading on Thursday after investors bet that below-normal temperatures that have hovered over the central and eastern reaches of the U.S. will eventually give way to springtime weather patterns.

Investors shrugged off bullish supply data and sold on the notion that cooler temperatures and falling inventories have now been priced into the market.

On the New York Mercantile Exchange, natural gas futures for delivery in May traded at USD4.037 per million British thermal units, down 0.77%.

The commodity hit a session low of USD3.974 and a high of USD4.120.

Weather forecasting models that called for a chilly end to winter have repeatedly extended their frigid forecasts into late March and early April.

By Thursday, prices had risen to levels ripe for profit taking amid sentiment that eventually, colder temperatures will give way to seasonal warming trends.

Investors shrugged off bullish inventory figures on sentiment that falling stockpiles were already priced into trading strategies along with the current cold snap gripping the heavily populated eastern half of the country.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended March 22 fell by 95 billion cubic feet, outpacing expectations for a drop of 87 billion cubic feet.

Total U.S. natural gas storage stood at 1,781 trillion cubic feet as of last week. Stocks were 642 billion cubic feet less than last year at this time and 61 billion cubic feet above the five-year average of 1.720 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 41 billion cubic feet below the five-year average, following net withdrawals of 73 billion cubic feet.

Stocks in the Producing Region were 30 billion cubic feet above the five-year average of 707 billion cubic feet after a net withdrawal of 17 billion cubic feet.









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