Investing.com Weekly Wrap-Up 15 November 2013

November 15th, 2013
in contributors, syndication

by Investing.com Staff, Investing.com

U.S. stocks gain on Yellen comments, U.S. data; Dow up 0.54%

U.S. stocks rose on Friday after weak U.S. industrial production data preceded by dovish statements delivered by Federal Reserve Chair Nominee Janet Yellen to investing.com-logoCongress on Thursday left many investors convinced stimulus tools will stay in place for the near future.

Stimulus tools such as the Fed's USD85 billion in monthly bond purchases aim to spur recovery by driving down interest rates, boosting stock prices in the process.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.54%, the S&P 500 index rose 0.42%, while the Nasdaq Composite index rose 0.33%.

Follow up:

The Federal Reserve reported earlier that U.S. industrial production contracted 0.1% in October after having increased 0.7% in September.

Analysts were expecting a 0.2% expansion, and the surprise contraction fanned sentiments the Fed won't scale back its USD85 billion in monthly bond purchases until early 2014, which gave stocks, the primary beneficiary of ultra-loose monetary policies, a shot in the arm on Friday.

On Thursday, Fed Chair Nominee Janet Yellen told the Senate Banking Committee that while the economy is on the mend, inflation and unemployment rates have room to move closer to Fed comfort zones, which markets interpreted as a sign the U.S. central bank wants to see consistent improvements to economic indicators before winding down stimulus tools.

Her comments put to rest lingering expectations that the Fed may announce plans to scale back stimulus tools at its December meeting.

Also in the U.S., the Federal Reserve of Bank of New York said its manufacturing activity index declined to -2.21 in November from 1.52 in October, defying expectations for a rise to 5.00.

Leading Dow Jones Industrial Average performers included Exxon Mobil, up 2.21%, Home Depot, up 1.37%, and American Express, up 1.11%.

The Dow Jones Industrial Average's worst performers included McDonald's, down 0.66%, Microsoft, down 0.43%, and United Technologies, down 0.08%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 0.04%, France's CAC 40 rose 0.19%, while Germany's DAX 30 rose 0.21%. Meanwhile, in the U.K. the FTSE 100 finished up 0.41%.

Forex

The dollar traded lower against most major currencies on Friday after industrial production data revealed activity at U.S. factories, mines and utilities was weaker in October than anticipated, while Federal Reserve Chair Nominee Janet Yellen's dovish Thursday testimony before Congress also weighed on the greenback.

In U.S. trading on Thursday, EUR/USD was up 0.25% at 1.3492.

Meanwhile in the euro zone, official data released earlier revealed that consumer price inflation remained slipped 0.1% in October from September and rose 0.7% on year, both in line with expectations.

Core consumer price inflation, which is stripped of volatile food, energy, alcohol and tobacco items, came in unchanged from September and rose 0.8% from a year earlier, also in line with market expectations.

The greenback was down against the pound, with GBP/USD up 0.31% at 1.6115.

The dollar was up against the yen, with USD/JPY up 0.18% at 100.21, and down against the Swiss franc, with USD/CHF down 0.17% at 0.9148.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.20% at 1.0446, AUD/USD up 0.57% at 0.9370 and NZD/USD trading up 0.77% at 0.8338.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.18% at 80.87.

GOLD

Gold prices trimmed their gains but remained in positive territory on Friday after investors took a breather from applauding Federal Reserve Chair Nominee Janet Yellen's dovish comments delivered to Congress on Thursday, which suggested stimulus tools should stay in place for now.

Stimulus tools such as the Fed's USD85 billion in monthly bond prices seek to spur recovery by driving down interest rates, weakening the U.S. dollar in the process and thus making gold an attractive hedge.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,288.30 during U.S. afternoon hours, up 0.16%.

Gold prices hit a session low of USD1,279.70 a troy ounce and high of USD1,290.60 a troy ounce.

Gold futures were likely to find support at USD1,260.70 a troy ounce, Tuesday's low, and resistance at USD1,325.70, Thursday's high.

The December contract settled down 0.22% at USD1,268.40 a troy ounce on Wednesday.

Elsewhere on the Comex, silver for December delivery was up 0.01% at USD20.725 a troy ounce, while copper for December delivery was up 0.40% and trading at USD3.173 a pound.

Oil

Oil prices jumped up and down on Friday as investors applauded Federal Reserve Chair Nominee Janet Yellen's dovish comments in the Senate on Thursday, while a U.S. supply report revealing hefty inventory hikes pushed prices lower.

On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD93.87 a barrel during U.S. trading, up 0.12%.

The commodity hit a session low of USD93.61 and a high of USD94.52. The December contract settled down 0.13% at USD93.76 a barrel on Thursday.

Oil futures were likely to find support at USD92.53 a barrel, Thursday's low, and resistance at USD95.38 a barrel, Monday's high.

On Thursday, Fed Chair Nominee Janet Yellen told the Senate Banking Committee that while the economy is on the mend, inflation and unemployment rates have room to move closer to Fed comfort zones.

Her comments put to rest lingering expectations that the Fed may announce plans to scale back stimulus tools at its December meeting.

Stimulus tools such as the Fed's USD85 billion in monthly bond purchases weaken the greenback by driving down interest rates to spur recovery, making oil an attractive buy on dollar-denominated exchanges.

Elsewhere, the U.S. Energy Information Administration reported Thursday that crude oil inventories last week rose by 2.6 million barrels, far more than the 994,000 barrels predicted by analysts, which capped oil's gains as did soft U.S. economic indicators.

A separate report showed that U.S. import prices fell 0.7% in October compared to expectations for a 0.4% decline after a downwardly revised 0.1% rise the previous month.

Meanwhile on the ICE Futures Exchange, Brent oil futures for January delivery were up 0.08% at USD108.37 a barrel, up USD14.50 from its U.S. counterpart.

Natural Gas

Natural gas prices rose on Friday after updated weather forecasts continued to call for below-normal temperatures across parts of the eastern half of the U.S. over the coming days.

On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.643 per million British thermal units during U.S. trading, up 1.05%.

The commodity hit a session low of USD3.576 and a high of USD3.649.

The December contract settled up 1.09% at USD3.605 per million British thermal units on Thursday.

Futures were likely to find support at USD3.491 per million British thermal units, Thursday's low, and resistance at USD3.659, Wednesday's high.

A cold snap currently gripping portions of the eastern half of the U.S. will give way to warmer temperatures but only for a few days, when another blast of arctic air will coming swooping down from Canada next week.

Colder temperatures hike the need for heating this time of year, increasing demand for natural gas at the nation's thermal power generators.

Still, computers models predicted the cooler air mass won't dip as far south as previous runs indicated, which capped the commodity's gains.

Elsewhere, natgasweather.com reported that from Nov. 22-28, cooler temperatures may settle over the northern third of the U.S., with modestly cooler conditions pushing into portions of the central U.S. at times.

Elsewhere, markets continued to give weekly supply data cautious applause.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Nov. 8 rose by 20 billion cubic feet, in line with expectations for an increase of 21 billion cubic feet.

Inventories rose by 12 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 19 billion cubic feet.

Total U.S. natural gas storage stood at 3.834 trillion cubic feet. Stocks were 80 billion cubic feet less than last year at this time and 58 billion cubic feet above the five-year average of 3.776 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 93 billion cubic feet below the five-year average, following net injections of 10 billion cubic feet.

Stocks in the Producing Region were 112 billion cubic feet above the five-year average of 1.185 billion cubic feet after a net injection of 12 billion cubic feet.









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