Investing.com Weekly Wrap-Up 25 October 2013

October 25th, 2013
in contributors

by Investing.com Staff, Investing.com

U.S. stocks end up on earnings, Fed outlook supports; Dow rises 0.39%

U.S. stocks finished higher on Friday after better-than-expected quarterly earnings drew applause on Wall Street, while ongoing expectations for the Federal Reserve to keep policy investing.com-logoloose into 2014 bolstered share prices as well. 

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.39%, the S&P 500 index rose 0.44%, while the Nasdaq Composite index rose 0.37%.

Follow up:

Procter & Gamble, UPS, Microsoft and Amazon released earnings reports that beat Wall Street expectations, sparking demand for stocks on Friday.

Meanwhile, conservative Senator Rand Paul reportedly threatened to delay Janet Yellen's nomination to chair the Federal Reserve, which dampened the rally somewhat though markets quickly dismissed the threat as unlikely to materialize, which gave stocks room to resume climbing.

Yellen is viewed by markets as dovish and likely to favor keeping the Fed's ultra-loose monetary policies in place, especially in wake of weak data.

The Thomson Reuters/University of Michigan final consumer sentiment index for October fell to 73.2 from 75.2 in September, worse than expectations for a downtick to 75.0.

The report added that inflation expectations ticked up to 3.0% in October, from 2.9% the previous month.

The data came after the Census Bureau said that U.S. core durable goods orders, which exclude transportation items, fell 0.1% in September, defying expectations for a 0.5% rise after a 0.1% decline the previous month.

Broad U.S. durable goods orders rose 3.7% last month, exceeding expectations for a 2.0% increase after a 0.1% rise in August.

Friday's lackluster data, which came in wake of weak labor-market data earlier this week, kept expectations going for the Federal Reserve to continue stimulating the economy with its USD85 billion in monthly bond purchases that drive down interest rates to spur recovery, weakening the greenback in the process.

Leading Dow Jones Industrial Average performers included Microsoft, up 5.83%, American Express, up 2.05%, and Intel, up 1.89%.

The Dow Jones Industrial Average's worst performers included Procter & Gamble, down 0.78%, Home Depot, down 0.63%, and IBM, down 0.55%.

European indices, meanwhile, finished mixed.

After the close of European trade, the EURO STOXX 50 fell 0.15%, France's CAC 40 fell 0.08%, while Germany's DAX 30 rose 0.06%. Meanwhile, in the U.K. the FTSE 100 finished up 0.12%.

Forex

The dollar moved flat to lower against most major currencies on Friday through it trimmed earlier losses as bottom fishers viewed the greenback as oversold after a soft consumer sentiment report weakened the currency earlier.

In U.S. trading on Friday, EUR/USD was up 0.06% at 1.3809.

Friday's lackluster U.S. economic data, which came in wake of weak labor-market data earlier this week, kept expectations going for the Federal Reserve to continue stimulating the economy with its USD85 billion in monthly bond purchases that drive down interest rates to spur recovery, weakening the greenback in the process.

The dollar, however, eventually reached levels that brought in the bottom fishers late Friday.

In the euro zone earlier, the Ifo Institute for Economic Research reported that Germany's business climate index fell to 107.4 in October from 107.7 in September, defying expectations for a rise to 108.0.

The data sent investors selling the euro for profits though the weak indicators in the U.S. sent the euro back into positive territory in late-session trading on Friday.

The dollar was up against the yen, with USD/JPY up 0.09% at 97.37, and down against the Swiss franc, with USD/CHF down 0.03% at 0.8921.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.31% at 1.0453, AUD/USD down 0.41% at 0.9583 and NZD/USD trading down 0.86% at 0.8283.

The pound moved lower against the dollar on Friday after investors viewed the greenback as oversold in wake of a soft U.S. consumer report.

In U.S. trading on Friday, GBP/USD was trading at 1.6170, down 0.20%, up from a session low of 1.6151 and off from a high of 1.6247.

Cable was likely to find support at 1.6116, Tuesday's low, and resistance at 1.6257, Wednesday's high. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.03% at 79.23.

Preliminary data earlier showed that the U.K. gross domestic product rose 0.8% in the third quarter, in line with expectations and up from 0.7% in the previous quarter.

The pound was down against the euro and down against the yen, with EUR/GBP up 0.19% at 0.8535 and GBP/JPY down 0.08% at 157.47.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.03% at 79.23.

Gold

Soft consumer sentiment and mixed durable goods reports sent gold posting modest gains on Friday by fueling growing expectations for the Federal Reserve to continue stimulating the economy with its monthly asset purchases.

Stimulus tools often weaken the dollar to drive recovery, making gold an attractive hedge.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,351.40 during U.S. afternoon hours, up 0.08%.

Gold prices hit a session low of USD1,336.60 a troy ounce and high of USD1,355.60 a troy ounce.

Gold futures were likely to find support at USD1,310.10 a troy ounce, Tuesday's low, and resistance at USD1,375.10, the high from Sept. 19.

The December contract settled up 1.22% at USD1,350.30 a troy ounce on Thursday.

Elsewhere on the Comex, silver for December delivery was down 1.05% at USD22.583 a troy ounce, while copper for December delivery was up 0.16% and trading at USD3.269 a pound.

Oil

Oil prices rose on Friday after U.S. data revealed orders for durable goods rose more than expected in September, which sparked expectations for increased activity in the nation's factories and an increase in demand for oil.

On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD97.82 a barrel during U.S. trading, up 0.73%.

The commodity hit a session low of USD97.01 and a high of USD97.91. The December contract settled up 0.26% at USD97.11 a barrel on Thursday.

The Census Bureau reported earlier that U.S. durable goods orders rose 3.7% last month, exceeding expectations for a 2.0% increase after a 0.1% rise in August, which drew applause in energy markets.

Core durable goods orders, which exclude transportation items, fell 0.1% in September, confounding expectations for a 0.5% rise after a 0.1% decline the previous month, though investors focused on the broader number largely.

Oil continued to rise on solid Chinese manufacturing data released Thursday.

The preliminary reading of China's HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.

China is the world's second-largest consumer of crude after the U.S., and the numbers sparked hopes that demand will strengthen in the Asian giant.

Weak U.S. consumer sentiment data capped oil's gains though only slightly.

Meanwhile on the ICE Futures Exchange, Brent oil futures for November delivery were down 0.32% at USD106.65 a barrel, up USD8.83 from its U.S. counterpart.

Natural Gas

Natural gas prices jumped up on Friday after updated weather forecasting models said below-normal temperatures currently in place over much of the central and eastern U.S. may stick around a little longer than previously predicted.

On the New York Mercantile Exchange, natural gas futures for delivery in November traded at USD3.675 per million British thermal units during U.S. trading, up 1.25%.

The commodity hit a session low of USD3.594 and a high of USD3.684.

The November contract settled up 0.28% at USD3.629 per million British thermal units on Thursday.

Futures were likely to find support at USD3.557 per million British thermal units, Thursday's low, and resistance at USD3.869, the high from Oct. 16.

Near-term weather forecasts indicated earlier that below-normal temperatures across much of the eastern half of the U.S. may stick around until early November for parts of the Midwest as opposed to late October as previously forecast, which sparked a rally in natural gas markets.

Colder temperatures prompt more businesses and homes to throttle up on their heating, which hikes demand for the commodity at the nation's thermal power plants.

Meanwhile, prices also rose on demand from bargain hunters digesting Thursday's bearish supply report.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Oct. 18 rose by 87 billion cubic feet, above forecasts for an increase of 79 billion cubic feet.

Inventories increased by 54 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 75 billion cubic feet.

Total U.S. natural gas storage stood at 3.741 trillion cubic feet. Stocks were 92 billion cubic feet less than last year at this time and 77 billion cubic feet above the five-year average of 3.664 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 80 billion cubic feet below the five-year average, following net injections of 50 billion cubic feet.

Stocks in the Producing Region were 106 billion cubic feet above the five-year average of 1.139 billion cubic feet after a net injection of 33 billion cubic feet.

Demand for natural gas tends to rise at the country's thermal power plants as temperatures fall, as homes and businesses throttle up on their heaters.

Hot or cold temperatures tend to boost demand for the commodity.

Natural gas accounts for about a quarter of U.S. electricity generation.















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