Weekly Wrap-Up 02 May 2014

May 2nd, 2014
in contributors, syndication

U.S. stocks slip on Ukraine unease; Dow ends down 0.28%

by Staff, Fears an escalating Ukraine crisis will escalate even further overshadowed an upbeat U.S. April jobs report and sent stocks falling on Friday.

At the close of U.S. trading, the Dow 30 fell 0.28%, the S&P 500 index fell 0.13%, while the NASDAQ Composite index fell 0.09%.

Follow up:

Geopolitical concerns in Europe eclipsed robust U.S. jobs numbers and dampened spirits on Wall Street earlier.

The U.N. Security Council met at Russia's request to discuss the Ukraine crisis on Friday, while separately, U.S. President Barack Obama earlier threatened to slap fresh sanctions on Russia if Moscow disrupts Ukrainian elections scheduled for May 25.

Ukraine's army and a pro-Russian rebels continued to skirmish earlier, stoking fears that the crisis will develop and drag the U.S. deeper into the standoff.

Elsewhere, the Labor Department reported earlier that the U.S. economy added 288,000 jobs in April, beating expectations for a 210,000 increase. March's figure was revised up to a 203,000 rise from a previously estimated 192,000 gain.

The private sector added 273,000 last month, more than an expected 210,000 increase. In March, the number of private sector jobs was revised up to a 202,000 increase a previously estimated 192,000 rise.

The report also showed that the U.S. unemployment rate fell to 6.3% in April, from 6.7% the previous month, compared to expectations for a fall 6.6%.

Still, concerns that long-term unemployment will remain a problem for the U.S. economy tarnished the otherwise positive jobs report, as the headline jobless rate fell in part due to a drop in the labor force, a sign that many who have been out of work for a long time quit looking for jobs and thus are no longer considered part of the labor pool.

Separately, data showed that U.S. factory orders rose 1.1% in March, less than the expected 1.4% gain, after a 1.5% rise in February, whose figure was revised down from a previously estimated 1.6% increase.

Leading Dow Jones Industrial Average performers included Boeing Company (NYSE:BA), up 1.16%, Walt Disney Company (NYSE:DIS), up 0.94%, and Exxon Mobil Corporation (NYSE:XOM), up 0.62%.

The Dow Jones Industrial Average's worst performers included Merck & Company Inc (NYSE:MRK), down 2.32%, Pfizer Inc (NYSE:PFE), down 1.30%, and Johnson & Johnson (NYSE:JNJ), down 1.20%.

European indices, meanwhile, finished largely lower.

After the close of European trade, the DJ Euro Stoxx 50 fell 0.84%, France's CAC 40 fell 0.65%, while Germany's DAX fell 0.49%. Meanwhile, in the U.K. the FTSE 100 rose 0.20%.


A robust U.S. April jobs report sent the dollar gaining though fears the Ukraine crisis is set to heat up wiped out the greenback's advance later in the session, leaving the greenback largely lower against most major currencies on Friday.

In U.S. trading on Friday, EUR/USD was up 0.04% at 1.3873.

Strong U.S. economic data cemented expectations that the Federal Reserve remains on course to dismantle stimulus programs that have weakened the dollar to spur recovery since 2012.

In the euro zone, data showed that the unemployment rate remained unchanged at 11.8% in March, confounding expectations for a rise to 11.9%. March's figure was revised down from a previously estimated rate of 11.9%.

Separately, Markit said Germany's manufacturing purchasing managers' index slipped to 54.1 last month, from a reading of 54.2 in March. Analysts had expected the index to remain unchanged in April.

In Italy however, the manufacturing PMI rose to a 35-month high of 54.0 last month, from a reading of 52.4 in March, while Spain's manufacturing PMI ticked down to 52.7 in April, from a reading of 52.8 the previous month.

The final euro zone manufacturing PMI ticked up to 53.4 in April, from 53.3 in March. Analysts had expected the index to remain unchanged last month.

The dollar was down against the yen, with USD/JPY down 0.11% at 102.22 and down against the Swiss franc, with USD/CHF down 0.14% at 0.8781.

The greenback was up against the pound, with GBP/USD down 0.13% at 1.6871.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.18% at 1.0981, AUD/USD down 0.06% at 0.9267 and NZD/USD up 0.34% at 0.8662.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.01% at 79.57.


Gold prices shot up on Friday as fears the Ukraine crisis will escalate bolstered the yellow metal's appeal as a safe-haven asset class, giving investors room to overlook an upbeat U.S. jobs report.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at 1,300.60 a troy ounce during U.S. trading, up 1.34%, up from a session low of $1,275.20 and off a high of $1,304.80.

The June contract settled down 0.96% at $1,283.40 on Thursday.

Futures were likely to find support at $1,275.20 a troy ounce, the session low, and resistance at $1,306.50, Monday's high.

Gold prices shrugged off otherwise bearish data out of the U.S. labor market.

Meanwhile, silver for July delivery was up 2.36% at $19.493 a troy ounce, while copper futures for July delivery were up 1.55% at $3.068 a pound.


An upbeat U.S. April jobs report coupled with fears the Ukraine crisis will escalate and threaten Russian crude exports sent oil futures rising on Friday.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in June traded at $99.82 a barrel during U.S. trading, up 0.40%. New York-traded oil futures hit a session low of $99.19 a barrel and a high of $100.13 a barrel.

The June contract settled down 0.32% at $99.42 a barrel on Thursday.

Nymex oil futures were likely to find support at $98.75 a barrel, Thursday's low, and resistance at $100.59 a barrel, Wednesday's high.

Capping gains, however, were ongoing anticipations for Libya to increase exports.

Libyan government officials and rebels reached an agreement to re-open oil ports in recent weeks, and expectations for crude to begin flowing sent investors bracing for increased global supply.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for June delivery were up 0.85%, trading at US$108.68 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$8.86 a barrel.

Natural Gas

Natural gas prices carried Thursday's losses into Friday, as investors avoided the commodity after data revealed U.S. inventories rose more than markets were expecting last week.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at $4.686 per million British thermal units during U.S. trading, down 0.71%. The commodity hit session high of $4.756 and a low of $4.680.

The June contract settled down 1.99% on Thursday to end at $4.719 per million British thermal units.

Natural gas futures were likely to find support at $4.646 per million British thermal units, the low from April 25, and resistance at $4.851, Wednesday's high.

A late-season cool snap that trekked across the U.S. in late April failed to make impact U.S. natural gas stockpiles.

The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ending April 25 rose by 82 billion cubic feet, well above forecasts for an increase of 75 billion cubic feet.

The five-year average gain for the period is 58 billion cubic feet.

Total U.S. natural gas storage stood at 981 billion cubic feet. Stocks were 790 billion cubic feet less than last year at this time and 984 billion cubic feet below the five-year average of 1.965 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 466 billion cubic feet below the five-year average, following net injections of 34 billion cubic feet.

Stocks in the Producing Region were 396 billion cubic feet below the five-year average of 824 billion cubic feet after a net injection of 35 billion cubic feet.

Spring and fall see the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.



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