September 27th, 2013
by Investing.com Staff, Investing.com
U.S. stocks fell on Friday as a congressional deadline to pass a spending package and avoid a government shutdown grew closer with little compromise in sight by the closing bell.
At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.46%, the S&P 500 index fell 0.41%, while the Nasdaq Composite index slid 0.15%.
Congress must approve a spending package by Oct. 1 or risk partial government shutdown afterwards.
While markets are expecting a last-minute deal, uncertainty steered investors away from the U.S. stocks on Friday.
The Democratically-controlled Senate earlier Friday approved a stop-gap spending bill to fund the government through Nov. 15.
The bill was stripped of language defunding President Barack Obama's healthcare reform law, though the legislation will go back to the Republican-controlled House of Representatives, which called for defunding the president's healthcare law in the first place.
On Friday afternoon, President Obama urged Congress to come to an agreement and prevent a shutdown.
Mixed data sent stocks falling as well.
Elsewhere, the Thomson Reuters/University of Michigan consumer sentiment index fell to 77.5 in September from a reading of 76.8 the previous month.
Analysts were expecting the index to rise to 78.0 this month.
Separately, official data showed that U.S. personal spending rose 0.3% in August, in line with expectations, after an upwardly revised 0.2% increase the previous month.
Data also showed that personal income in the U.S. rose 0.4% last month as expected after an upwardly revised 0.2% gain in July, also in line with expectations.
Core personal consumption expenditures, which exclude food and energy, rose 0.2% in August, more than the expected 0.1% gain after a 0.1% increase in July.
The data continued to cloud market expectations as to when the Federal Reserve will begin taper its USD85 billion monthly bond-buying program, which bolster stocks prices by driving down interest rates to spur recovery.
Leading Dow Jones Industrial Average performers included Nike, up 4.68%, Microsoft, up 1.53%, and Pfizer, up 1.30%.
The Dow Jones Industrial Average's worst performers included Intel, down 1.88%, Cisco, down 1.85%, and IBM, down 1.76%.
European indices, meanwhile, finished largely lower.
After the close of European trade, the EURO STOXX 50 fell 0.20%, France's CAC 40 rose 0.07%, while Germany's DAX 30 fell 0.03%. Meanwhile, in the U.K. the FTSE 100 finished down 0.81%.
The dollar slumped against most major currencies on Friday as investors largely avoided the currency as a congressional deadline to pass a spending package and avoid a government shutdown grew closer.
In U.S. trading on Friday, EUR/USD was up 0.22% at 1.3519.
Congress must approve a spending package by Oct. 1 or risk a partial government shutdown afterwards.
While markets are expecting a last-minute deal, uncertainty steered investors away from the U.S. currency on Friday.
U.S. economic data continued to cloud market expectations as to when the Federal Reserve will begin taper its USD85 billion monthly bond-buying program, which weakens the dollar by driving down interest rates to spur recovery.
Meanwhile in Europe, preliminary data showed that Germany's consumer price index was flat in September, in line with market expectations.
The greenback was down against the pound, with GBP/USD up 0.59% at 1.6136.
Across the Atlantic, sterling strengthened after Bank of England Governor Mark Carney told the Yorkshire Post that he sees no need for more bond-buying given the signs of recovery in the U.K. economy.
The dollar was down against the yen, with USD/JPY down 0.78% at 98.25, and down against the Swiss franc, with USD/CHF trading down 0.50% at 0.9058.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.05%at 1.0305, AUD/USD down 0.46% at 0.9316 and NZD/USD trading down 0.18% at 0.8277.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.32% at 80.37.
Gold prices shot up on Friday after investors avoided the dollar out of fears that a budgetary impasse in the U.S. Congress may lead to a partial government shutdown in October.
Gold and the dollar tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,339.30 during U.S. afternoon hours, up 1.15%.
Gold prices hit a session low of USD1,320.60 a troy ounce and high of USD1,344.40 a troy ounce.
Gold futures were likely to find support at USD1,306.20 a troy ounce, Tuesday's low, and resistance at USD1,375.10, the high from Sept. 19.
The December contract settled down 0.91% at USD1,324.10 a troy ounce on Thursday.
While market consensus remains for the Fed to begin tapering the program this year, most agree the U.S. central bank will take its time dismantling the program, while monetary tightening is nowhere on the horizon.
Elsewhere on the Comex, silver for December delivery was up 0.26% at USD21.822 a troy ounce, while copper for December delivery was up 0.60% and trading at USD3.327 a pound.
Crude prices edged lower on Friday after bottom fishers who sent prices rising earlier sold for profits and jumped to the sidelines in wake of soft consumer sentiment data out of the U.S.
On the New York Mercantile Exchange, light sweet crude futures for delivery in November traded at USD102.89 a barrel during U.S. trading, down 0.14%.
The November contract settled up 0.36% at USD103.03 a barrel on Thursday.
The commodity hit a session low of USD102.37 and a high of USD103.77.
Bargain hunting sent prices rising earlier, though soft U.S. data eventually led to profit taking by fueling concerns that U.S. recovery still faces potholes and may demand less fuel and energy going forward.
Elsewhere, thawing tensions between the U.S. and Iran pushed prices down as well by allaying concerns that a U.S. military strike on Tehran's ally Syria would engulf the broader Middle East into conflict and threaten global supply.
Meanwhile on the ICE Futures Exchange, Brent oil futures for November delivery were down 0.65% at USD108.51 a barrel, up USD5.62 from its U.S. counterpart.
Natural gas prices fell on Friday as investors avoided the commodity due to a bearish U.S. supply report as well as forecasts for mild fall temperatures.
On the New York Mercantile Exchange, natural gas futures for delivery in November traded at USD3.547 per million British thermal units during U.S. trading, down 0.57%.
The November contract settled up 0.59% at USD3.567 per million British thermal units on Thursday.
The commodity hit a session low of USD3.522 and a high of USD3.590.
The Energy Information Administration on Thursday reported that inventories rose 87 billion cubic feet in the week ending Sept. 20 to hit 3.386 trillion, the biggest increase since Aug. 2.
Analyst were expecting the figure to rise by 76 billion cubic feet, and the numbers sent prices falling in early U.S. trading.
Stocks were 179 billion cubic feet less than last year at this time and 30 billion cubic feet above the 5-year average of 3.356 trillion cubic feet.
In the East Region, stocks were 115 billion cubic below the 5-year average following net injections of 54 billion cubic feet.
Stocks in the Producing Region were 95 billion cubic feet above the 5-year average of 1.030 trillion cubic feet after a net injection of 25 billion cubic feet.
Stocks in the West Region were 50 billion cubic feet above the 5-year average after a net addition of 8 billion cubic feet. At 3.386 trillion cubic feet, total working gas is within the 5-year historical range.
Elsewhere, forecasts for mild temperatures over much of the U.S. weighed on prices as well.
Demand for natural gas tends to wane at the country's thermal power plants as temperatures moderate, as homes and businesses throttle back on their air conditioners.
Hot or cold temperatures tend to boost demand for the commodity.
Natural gas accounts for about a quarter of U.S. electricity generation.