Investing.com Weekly Wrap-Up 24 October 2014

October 24th, 2014
in contributors, syndication, forex

U.S. stocks rise on earnings, shrug off data, Ebola fears; Dow up 0.76%

by Investing.com Staff, Investing.com

U.S. stocks rose on Friday applauding a fresh batch of positive third-quarter earnings, which gave investors room to shrug off soft home sales data and a new case of Ebola diagnosed in the United States. investing.com-logo

At the close of U.S. trading, the Dow 30 rose 0.76%, the S&P 500index rose 0.71%, while the NASDAQ Composite index rose 0.69%.

The CBOE Volatility Index index, which measures the outlook for market volatility, was down 2.54% at 16.11.

Follow up:

Stocks rose as investors cheered better-than-expected earnings from Microsoft and Procter & Gamble one day after 3M Company (NYSE:MMM), General Motors Company (NYSE:GM) and Caterpillar Inc (NYSE:CAT) beat consensus forecasts, giving investors room to shrug off soft home sales data.

The Census Bureau reported earlier that U.S. new home sales rose 0.2% in September to 467,000 units, missing expectations for an increase to 470,000 units.

The August figure was downwardly revised to a 15.3% climb to 466,000 units from a previously estimated 18.0% jump to 504,000 units.

Still, a longer-range view of economic indicators still points to a sustained U.S. recovery, including in the housing sector.

Earlier in the week, the National Association of Realtors reported that U.S. existing home sales increased 2.4% to a 5.17 million units last month from 5.05 million in August. Analysts had expected existing home sales to rise 1% to 5.10 million units in September.

Elsewhere, a doctor who recently returned from Guinea tested positive for Ebola in New York City, though expectations for authorities to contain the virus gave investors room to focus on earnings and stocks room to rise.

Leading Dow Jones Industrial Average performers included Microsoft Corporation (NASDAQ:MSFT), up 2.45%, 3M Company (NYSE:MMM), up 2.44%, and Procter & Gamble Company (NYSE:PG), up 2.31%.

The Dow Jones Industrial Average's worst performers included Visa Inc (NYSE:V), down 0.39%, Chevron Corporation (NYSE:CVX), down 0.26%, and International Business Machines (NYSE:IBM), down 0.08%.

European indices, meanwhile, ended the day lower.

After the close of European trade, the DJ Euro Stoxx 50 fell 0.36%, France's CAC 40 fell 0.69%, while Germany's DAX fell 0.66%. Meanwhile, in the U.K. the FTSE 100 fell 0.47%.

Forex

The dollar traded lower against most major currencies after soft home sales figures and fresh fears of an Ebola outbreak in the U.S. prompted investors to avoid the U.S. currency.

In U.S. trading on Friday, EUR/USD was up 0.17% at 1.2668.

The dollar dipped after the Census Bureau reported earlier that U.S. new home sales rose 0.2% in September to 467,000 units, missing expectations for an increase to 470,000 units.

The August figure was downwardly revised to a 15.3% climb to 466,000 units from a previously estimated 18.0% jump to 504,000 units, and the data weakened the dollar.

While the Federal Reserve is widely seen closing its bond-buying program this month, the timing of rate hikes in 2015 still remains unclear.

Still, the dollar didn't plunge, as a longer-range view of economic indicators still points to a sustained U.S. recovery, including in the housing sector.

Earlier in the week, the National Association of Realtors reported that U.S. existing home sales were better than expected in September which had buoyed the dollar previously .

Elsewhere, a doctor who recently returned from Guinea tested positive for Ebola in New York City, which weakened the greenback on concerns that fears of a U.S. outbreak could slow growth.

Meanwhile in Europe, upbeat homegrown data gave the euro added support, which chipped away at the U.S. currency.

The Gfk German consumer climate index rose to 8.5 in October from 8.4 in September, whose figure was revised up from a previously estimated reading of 8.3.

Analysts had expected the index to fall to 8.0 this month.

The single currency had also found support on Thursday after data showed that the euro zone saw a marginal uptick in business activity in October.

Research group Markit Economics reported that its preliminary manufacturing purchasing managers' index for the euro area ticked up to 50.7 this month from a final reading of 50.3 in September. Analysts had expected the index to slide to 49.9.

The service-sector PMI held steady at 52.4, slightly above expectations of 52.0.

The dollar was down against the yen, with USD/JPY down 0.20% at 108.05, and down against the Swiss franc, with USD/CHF down 0.20% at 0.9521.

The greenback was down against the pound, with GBP/USD up 0.33% at 1.6084.

The Office for National Statistics reported earlier that the U.K.'s preliminary gross domestic product rose 0.7% in the third quarter, in line with expectations, after a 0.9% increase in the three months to June.

Year-on-year, Britain's GDP rose at an annualized rate of 3.0% in the last quarter, also in line with expectations, and down from a 3.2% growth rate in the second quarter.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.02% at 1.1229, AUD/USD up 0.48% at 0.8802 and NZD/USD up 0.49% at 0.7860.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.20% at 85.79.

Commitments of Traders data from the CFTC (Commodity Future Trading Commission) - Bearishness increased significantly for the S&P 500 and bullishness inceased significantly for gold. Bearishness decreased significantly for the Japanese yen and the Mexican peso. Other futures tracked below showed minor changesfor the week.

cot-2014-oct-14

Gold

Gold prices edged up on Friday after soft U.S. home sales softened the dollar, though gains were seen as short-lived due to ongoing expectations for the Federal Reserve to begin dismantling ultra-loose monetary policies that have supported the yellow metal since the 2008 financial crisis.

Gold and the dollar tend to trade inversely with one another.

On the Comex division of the New York Mercantile Exchange, goldfutures for December delivery traded at $1,231.30 a troy ounce, up 0.18%, up from a session low of $1,229.10 and off a high of $1,234.40.

The December contract settled down 1.32% at $1,229.10 on Thursday.

Futures were likely to find support at $1,226.30 a troy ounce, Thursday's low, and resistance at $1,255.60, Tuesday's high.

Gold gained after the Census Bureau reported earlier that U.S. new home rose slightly less than expected in September, which fueled some safe-haven demand for the precious metal. Also the August figure was downwardly revised which also added to the safe haven sentiment. The new home data Friday offset the slight shortfall in the existing homes report.

Overall the housing data weakened the dollar somewhat and boosted gold's appeal as a hedge, because, while the Federal Reserve is widely seen closing its bond-buying program this month, the timing of rate hikes in 2015 still remains unclear.

Still, gold didn't surge, as a longer-range view of economic indicators still points to a sustained U.S. recovery, including in the housing sector.

Meanwhile, silver for December delivery was up 0.20% at $17.193 a troy ounce, while copper futures for December delivery were down 0.09% at $3.037 a pound.

Oil

Oil prices dropped on Friday after markets dismissed Thursday's news reports that Saudi Arabia trimmed output in September to support the market.

In the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in December traded down 1.02% at $81.25 a barrel during U.S. trading, up from a session low of $80.37 a barrel and off a high of $82.00 a barrel.

The December contract settled up 1.95% at $82.09 a barrel on Thursday.

Support for the commodity was seen at $80.05 a barrel, Thursday's low, and resistance at $83.26 a barrel, Tuesday's high.

Oil prices had shot up on Thursday on news reports that Saudi Arabia cut crude oil production by about 328,000 barrels in September to a total of 9.36 million barrels, though by Friday, clarifications that supplies were not cut though some barrels went into storage sent futures falling, especially on report overall output actually increased last month.

Meanwhile, reports that a doctor tested positive for the Ebola virus in New York City added to the selloff amid concerns that fears of a broader output could weigh on U.S. recovery and dampen demand for fuel and energy.

Soft U.S. housing data kept prices in negative territory as well.

Separately, on the ICE Futures Exchange in London, Brent oil futures for December delivery were down 0.37% at US$86.51 a barrel, while the spread between Brent and U.S. crude contracts stood at $5.26.

Natural Gas

Natural gas prices moved lower on Friday after updated weather-forecasting models continued to call for mild autumn temperatures to hold across much of the U.S. and curb demand for both heating and air conditioning, prompting thermal power plants to burn less of the commodity as a result.

On the New York Mercantile Exchange, natural gas futures for delivery in November were down 0.50% at $3.604 per million British thermal units during U.S. trading. The commodity hit a session low of $3.560, and a high of $3.666.

The November contract settled down 1.01% on Thursday to end at $3.622 per million British thermal units.

Natural gas futures were likely to find support at $3.545 per million British thermal units, the low from Nov. 19, 2013, and resistance at $3.718, Wednesday's.

Updated weather-forecasting models called for mild temperatures across much of the U.S. into early November, and while a blast of cold air could make their way into the northern U.S. in the coming week or two, uncertainty as to how far south it could reach kept natural gas prices in negative territory.

Natgasweather.com reported in its Friday midday update:

"If there were additional sub-freezing weather systems to follow it would be different, but the storms that impact the U.S. around November 4-7th will likely again be over the Northwest and Northeast corners . This simply leaves too much of the U.S. under pleasant conditions and should result in another larger than normal build for early November. "

 









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