Investing.com Weekly Wrap-Up 14 November 2014

November 14th, 2014
in contributors, syndication, forex

U.S. stocks mixed on healthcare losses, oil supports; Dow slides 0.10%

by Investing.com Staff, Investing.com

U.S. stock indices traded mixed to higher on Friday led by a sell off in the healthcare sector, though expectations that lower oil prices may boost consumer spending offset losses. investing.com-logo

At the close of U.S. trading, the Dow 30 fell 0.10%, the S&P 500index rose 0.02%, while the NASDAQ Composite index rose 0.18%.

The CBOE Volatility Index index, which measures the outlook for market volatility, was down 2.76% at 13.41.

Follow up:

Healthcare stocks fell on Friday as investors sold for profits,locking in several sessions of gains, which brought broader stock indices lower on Friday, though losses were limited.

Data released earlier revealed an uptick in retail sales and consumer sentiment, a sign that falling oil prices have brought down gasoline prices to the point that individuals and families may be seeing more discretionary income.

The Thomson Reuters/University of Michigan's preliminary reading on the overall consumer sentiment index for November hit 89.4, its highest reading since July 2007, beating forecasts for an 87.5 reading.

Also in the U.S., the Census Bureau reported that U.S. retail sales rose 0.3% last month, exceeding expectations for a 0.2% gain, after a 0.3% fall in September.

Core retail sales, which exclude volatile transportation items, increased by 0.3% in October, compared to expectations for a 0.2% slip the previous month.

Oil prices rose on Friday amid talk that OPEC countries may trim output at their November meeting, though they still remain subdued, moving off four-year lows earlier Friday.

Oil ministers from Saudi Arabia and Kuwait have recently resisted calls to lower production, while Libya, Venezuela and Ecuador have asked for action to prevent further price declines.

The 12-member oil cartel is scheduled to meet in Vienna on Nov. 27 to discuss whether to adjust their production target for 2015.

Saudi Arabia has hinted at a willingness to let prices slide on the presumed expectations that U.S. shale producers will halt operations as a result, as such production costs more than traditional drilling.

Once U.S. shale producers table their operations for profitability reasons, prices would presumably rise as the global economy absorbs excess supply.

By Friday, sentiments that prices may be falling too low for even Saudi Arabia sparked talk of a possible OPEC move to shore up prices, which boosted oil prices, though they still remain low from a longer-term view.

The International Energy Agency reported earlier that prices could slump even further in 2015.

Leading Dow Jones Industrial Average performers included Cisco Systems Inc (NASDAQ:CSCO), up 2.49%, International Business Machines (NYSE:IBM), up 0.84%, and Chevron Corporation (NYSE:CVX), up 0.81%.

The Dow Jones Industrial Average's worst performers included Johnson & Johnson (NYSE:JNJ), down 0.83%, Visa Inc (NYSE:V), also down 0.83%, and UnitedHealth Group Incorporated (NYSE:UNH), down 0.82%.

European indices, meanwhile, ended the day higher.

After the close of European trade, the DJ Euro Stoxx 50 rose 0.10%, France's CAC 40 rose 0.35%, while Germany's DAX rose 0.05%. Meanwhile, in the U.K. the FTSE 100 rose 0.29%.

Forex

The dollar initially strengthened against its peers on Friday in wake of upbeat U.S. retail sales and consumer sentiment data, though profit taking and cheery European growth numbers sent the greenback sliding later in the session.

In U.S. trading on Thursday, EUR/USD was up 0.42% at 1.2528.

Friday's strong U.S. consumer data bolstered expectations for the Federal Reserve to raise interest rates in 2015, and gave the greenback the edge over the euro earlier, though the single currency bounced back after investors digested upbeat euro area growth figures.

Eurostat, the European Union's statistical office, reported earlier that euro area's gross domestic product rose 0.2% in the third quarter from the second, more than the expected 0.1% uptick.

The bloc's economy expanded at an annual rate of 0.8% in the third quarter, compared to expectations for 0.7% growth.

Earlier Friday, a preliminary report showed that Germany's GDP rose 0.1% in the last quarter, in line with expectations, after a revised 0.1% contraction in the three months to June.

France's economy grew 0.3% in the third quarter, exceeding expectations for growth of 0.1%, after a contraction of 0.1% in the previous quarter.

Elsewhere in Europe Eurostat reported that inflation came in flat in October, in line with market expectations, after a 0.4% rise in September.

The bloc's annual rate of inflation remained unchanged at 0.4% last month, also in line with expectations.

Core CPI in the euro zone, which excludes food, energy, alcohol and tobacco, ticked down to an annual rate of 0.7% last month from 0.8% in September.

The data fueled further concerns over persistently low levels of inflation in the euro area. The European Central Bank targets an inflation rate of close to, but just below 2%, though Friday's growth rate eclipsed inflation data, seen by many as already priced into trading.

The dollar was up against the yen, with USD/JPY up 0.44% at 116.29, and down against the Swiss franc, with USD/CHF down 0.49% at 0.9589.

The yen continued to come under broad selling pressure amid mounting speculation that Prime Minister Shinzo Abe could call a snap election in December, which would allow him to better push through his reforms, which call for a weaker Japanese currency to spur growth.

The greenback was up against the pound, with GBP/USD down 0.21% at 1.5678.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.83% at 1.1275, AUD/USD up 0.46% at 0.8757 and NZD/USD up 0.37% at 0.7910.

Statistics Canada reported earlier that manufacturing sales rose by 2.1% in September, beating expectations for an increase of 1.3%. The August figure was revised to a 3.5% decline from a previously estimated 3.3% drop.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.28% at 87.59.

Gold

Gold futures rose in Friday afternoon trading after investors locked in dollar gains from upbeat U.S. data and sold the greenback for profits.

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 were up 2.41% at $1,189.50, up from a session low of $1,146.10 and off a high of $1,192.80.

The December contract settled up 0.21% at $1,161.50 on Thursday.

Futures were likely to find support at $1,145.50 a troy ounce, Tuesday's low, and resistance at $1,235.50, the high from Oct. 28.

Upbeat U.S. data boosted the dollar earlier but good news out of Europe convinced investors let the dollar cool its rally, which boosted gold prices.

Friday's U.S. consumer data bolstered expectations for the Federal Reserve to raise interest rates in 2015, and gave the greenback the edge, though the euro bounced back after investors digested upbeat euro area growth figures, which bolstered gold's appeal to a softer U.S. currency.

Meanwhile, silver for December delivery was up 4.37% at $16.303 a troy ounce, while copper futures for December delivery were up 1.75% at $3.047 a pound.

Oil

Crude futures shot up from four-year lows on Friday amid market talk that OPEC countries may consider cutting output to bolster prices at its upcoming meeting.

In the New York Mercantile Exchange, West Texas Intermediate crude oil futures for delivery in December traded up 1.36% at $75.22 a barrel during U.S. trading, up from a session low of $73.28 a barrel and off a high of $75.73 a barrel.

The December contract settled down 3.85% at $74.21 a barrel on Thursday.

Support for the commodity was seen at $72.81 a barrel, the low from Sept. 21, 2010, and resistance at $78.08 a barrel, Wednesday's high.

Talk that prices may be falling too low for comfort to the point that OPEC may act gave oil prices a boost on Friday.

Oil ministers from Saudi Arabia and Kuwait have recently resisted calls to lower production, while Libya, Venezuela and Ecuador have asked for action to prevent further price declines.

The 12-member oil cartel is scheduled to meet in Vienna on Nov. 27 to discuss whether to adjust their production target for 2015.

Saudi Arabia has hinted at a willingness to let prices slide on the presumed expectations that U.S. shale producers will halt operations as a result, as such production costs more than traditional drilling.

Once U.S. shale producers table their operations for profitability reason, prices would presumably rise as the global economy absorbs excess supply.

By Friday, sentiments that prices may be falling too low for even Saudi Arabia sparked talk of a possible OPEC move to shore up prices, which boosted oil prices.

The International Energy Agency reported earlier that prices could slump even further in 2015.

Upbeat U.S. consumer data supported oil as well by stoking hopes that the world's largest economy is gaining steam and will consume more fuel and energy going forward.

Separately, on the ICE Futures Exchange in London, Brent oil futures for December delivery were up 2.10% at US$79.12 a barrel, while the spread between Brent and U.S. crude contracts stood at $3.90.

Natural Gas

Natural gas futures edged higher on Friday after investors digested a lackluster weekly supply report and determined the numbers largely met expectations.

On the New York Mercantile Exchange, natural gas futures for delivery in December were up 1.11% at $4.021 per million British thermal units during U.S. trading. The commodity hit a session low of $3.935, and a high of $4.041.

The December contract settled down 4.97% on Thursday to end at $3.977 per million British thermal units.

Natural gas futures were likely to find support at $3.620 per million British thermal units, the low from Oct. 28, and resistance at $4.544, Monday's high.

The Energy Information Administration reported earlier that U.S. Natural Gas Storage rose to a seasonally adjusted annual rate of 40 billion cubic feet last week from 91 billion in the preceding week.

Analysts had expected U.S. natural gas storage to rise by 39 billion cubic feet last week, and after digesting the data, investors determined that the report met market expectations, which gave the commodity support.

Investors kept chilly weather patterns in focus as well.

Blasts of cold weather are due to trek across the U.S. in the coming week followed my periods of milder weather, though heating demand should pick up albeit in a choppy manner.









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