Investing.com Weekly Wrap-Up 22 November 2013

November 22nd, 2013
in contributors, syndication

by Investing.com Staff, Investing.com

U.S. stocks extend gains on jobless data; Dow up 0.34%

U.S. stocks extended Thursday's gains into Friday after investors continued to applaud strong weekly jobless claims data.investing.com-logo

Sentiments continued to build that the U.S. economy is improving though the Federal Reserve will keep stimulating the economy with stock-boosting bond purchases in the coming months to be sure recovery can stand on its own.

Follow up:

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

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.34%, the S&P 500 index rose 0.50%, while the Nasdaq Composite index rose 0.57%.

Data released on Thursday revealed manufacturing activity in the Philadelphia region expanded at the slowest pace in six months in November, which fanned market expectations for the Federal Reserve to keep its USD85 billion in monthly asset purchases in place through early 2014.

On the flipside, the Department of Labor said Thursday that the number of individuals filing for initial jobless benefits in the U.S. last week fell by 21,000 to a seasonally adjusted 323,000, beating expectations for a decline of 9,000.

The data pushed stocks higher for a second day by fueling hopes that the U.S. economy is on the mend and will give stocks room to rise on fundamentals, though in the meantime, Fed support will remain for the coming months and keep prices elevated until the U.S. central bank feels the country can stand on its own.

Leading Dow Jones Industrial Average performers included Boeing, up 2.29%, The Travelers Companies, up 1.45%, and Wal-Mart Stores, up 1.24%.

The Dow Jones Industrial Average's worst performers included Intel, down 5.45%, IBM, down 1.56%, and Home Depot, down 0.82%.

European indices, meanwhile, finished largely higher.

After the close of European trade, the EURO STOXX 50 rose 0.35%, France's CAC 40 rose 0.58%, while Germany's DAX 30 rose 0.25%. Meanwhile, in the U.K. the FTSE 100 finished down 0.11%.

Forex

The dollar traded lower against most major currencies on Friday mainly as investors shed safe-haven greenback positions after a widely-watched German sentiment data pleased investors.

In U.S. trading on Friday, EUR/USD was up 0.50% at 1.3548.

The euro rose in a risk-on trading session after the Ifo Institute for Economic Research reported earlier that Germany's business climate index rose to a 19-month high of 109.3 in November from 107.4 in October.

Analysts were expecting the index to rise to 107.7 this month, and the better-than-expected reading sparked hopes for a more robust European recovery.

Also in Germany, data revealed the country's gross domestic product expanded 0.3% in the third quarter, in line with expectations.

The euro saw added demand after European Central Bank President Mario Draghi on Thursday downplayed recent media reports that monetary authorities were considering cutting deposit rates into negative territory.

The dollar, meanwhile, saw some support after Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits in the U.S. last week fell by 21,000 to a seasonally adjusted 323,000, beating expectations for a decline of 9,000.

Separate government data revealed that the U.S. producer price index declined 0.2% in October, in line with expectations, while the country's core PPI rose 0.2%, beating market calls for a 0.1% gain.

The greenback was down against the pound, with GBP/USD up 0.08% at 1.6212.

The dollar was up against the yen, with USD/JPY up 0.15% at 101.32, and down against the Swiss franc, with USD/CHF down 0.64% at 0.9070.

The yen came under pressure after Bank of Japan Governor Haruhiko Kuroda said he will do everything possible to restrict an increase in long-term yields.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.08% at 1.0528, AUD/USD down 0.68% at 0.9172 and NZD/USD trading down 0.18% at 0.8192.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.34% at 80.73.

GOLD

Gold prices edged higher tracking solid German sentiment data on Friday though gains were cautious amid sentiments that Federal Reserve stimulus programs that have supported the yellow metal over the recent past are on their way out soon.

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

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 USD1,244.30 during U.S. afternoon hours, up 0.06%.

Gold prices hit a session low of USD1,240.50 a troy ounce and high of USD1,248.20 a troy ounce.

Gold futures were likely to find support at USD1,235.90 a troy ounce, Thursday's low, and resistance at USD1,293.60, the high from Nov. 14.

The December contract settled down 1.14% at USD1,243.60 a troy ounce on Thursday.

Gold prices rose as the dollar softened after the Ifo Institute for Economic Research reported earlier that Germany's business climate index rose to a 19-month high of 109.3 in November from 107.4 in October.

The news strengthened the euro against the dollar, often a recipe for rising gold prices as the yellow metal tends to gain when the greenback softens.

The euro saw added demand after European Central Bank President Mario Draghi on Thursday downplayed recent media reports that monetary authorities were considering cutting deposit rates into negative territory.

Capping gains, however, were ongoing sentiments that the Federal Reserve will announce plans to trim its monthly asset-purchasing program in the coming months provided recovery continues gaining steam.

On Thursday, the Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits in the U.S. last week fell by 21,000 to a seasonally adjusted 323,000, beating expectations for a decline of 9,000.

Elsewhere on the Comex, silver for December delivery was down 0.36% at USD19.862 a troy ounce, while copper for December delivery was up 0.75% and trading at USD3.216 a pound.

Oil

Oil prices edged lower on Friday after investors locked in gains stemming from Thursdays bullish jobless claims report and sold for profits, while hopes for an end to Iran's nuclear impasse with the West also softened prices.

On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD95.18 a barrel during U.S. trading, down 0.27%.

The commodity hit a session low of USD94.07 and a high of USD95.56. The January contract settled up 1.69% at USD95.44 a barrel on Thursday.

Oil futures were likely to find support at USD93.22 a barrel, Tuesday's low, and resistance at USD95.59 a barrel, Thursday's high.

The Department of Labor reported on Thursday that the number of individuals filing for initial jobless benefits in the U.S. last week fell by 21,000 to a seasonally adjusted 323,000, beating expectations for a decline of 9,000.

The news sparked demand for oil by stoking hopes for a more robust U.S. economy down the road, though profit taking wiped out the commodity's gains on Friday.

Elsewhere, hopes that talks among the U.S., Russia, China, Britain, Germany, France and Iran will eventually leaded to a dismantling of Tehran's alleged nuclear weapons program pushed prices lower as well.

A deal would resume the flow of Iranian crude into global markets and lower prices, as trade sanctions slapped on Iran due to its alleged nuclear ambitions have taken out more than 1 million barrels per day of oil from the global market.

Meanwhile on the ICE Futures Exchange, Brent oil futures for January delivery were up 0.72% at USD110.88 a barrel, up USD15.70 from its U.S. counterpart.

Natural Gas

Natural gas prices rose on Friday after updated weather forecasting models called for below-normal temperatures across much of the lower 48 states over the next seven to ten days, which included the possibility of powerful winter storm shooting up the Atlantic seaboard.

On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.774 per million British thermal units during U.S. trading, up 1.93%.

The commodity hit a session low of USD3.682 and a high of USD3.778.

The December contract settled up 0.76% at USD3.702 per million British thermal units on Thursday.

Futures were likely to find support at USD3.546 per million British thermal units, Tuesday's low, and resistance at USD3.787, the high from Oct. 27.

Natural gas prices rose after weather services called for a current cool snap to give way to a brief warming trend across parts of the southern U.S. before another blast of cold air sweeps across the country next week, which could drag a low pressure system up with it and create stormy conditions across the East Coast.

Colder temperatures hike the need for heating and thus increase demand for natural gas at the nation's thermal power generators.

A bullish supply report released on Thursday supported prices as well.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Nov. 15 fell by 45 billion cubic feet, outpacing expectations for a withdrawal of 33 billion cubic feet.

Inventories fell by 36 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 2 billion cubic feet.

Total U.S. natural gas storage stood at 3.789 trillion cubic feet. Stocks were 89 billion cubic feet less than last year at this time and 15 billion cubic feet above the five-year average of 3.774 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 118 billion cubic feet below the five-year average, following net withdrawals of 31 billion cubic feet.

Stocks in the Producing Region were 96 billion cubic feet above the five-year average of 1.188 billion cubic feet after a net withdrawal of 13 billion cubic feet.









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