Investing.com Weekly Wrap-Up 12 June 2015

June 12th, 2015
in contributors, syndication, forex

U.S. stocks fall sharply as Greek fears, wavering dollar weigh

by Investing.com Staff, Investing.com

U.S. stocks fell broadly on Friday, amid a wavering dollar and mounting fears of a Greek default on its sovereign debt one day after the collapse of high-level talks with the IMF.

The Dow Jones Industrial Average fell more than 100 points erasing most of the gains from Wednesday's session when soared it more than 1%. TheNASDAQ Composite index and the S&P Composite index also fell more than 0.5% on a bearish day for stocks. Bolstered by Wednesday's gains, the Dow had been on pace for one of its best weeks over the last several months until Friday's sell-off when it fell 140.53 or 0.78% to 17,898.84. The NASDAQ also closed the week on a down note, dipping 31.41 or 0.62% to 5,051.10.

Follow up:

The S&P 500, meanwhile, lost 14.75 or 0.70% to 2,094.11, as all 10 sectors closed in the red. Stocks in the Energy and Health Care sectors lagged, plummeting by more than 1%.

U.S. stocks were relatively unchanged after President Barack Obama's trade deal stalled in the House of Representatives on Friday afternoon. In a 302-126 vote the House defeated a Trade Adjustment Assistance bill that was connected to the president's main agenda item, a bill that would give the president "fast-track authority," to negotiate trade deals. Rep. John Boehner (R, Ohio) requested for a re-vote on the bill for next Tuesday. While the house did approve the fast-track legislation, passing the so-called Trade Promotion Authority bill by a vote of 219-211, both parts needed to be passed for the bill to go to the president.

The top performer on the Dow was Nike Inc (NYSE:NKE), which lost 0.1 or 0.1% to 103.78. All 30 components on the Dow closed in the red on Friday. The worst performer was Merck & Company Inc (NYSE:MRK), which fell 1.04 or 1.77% to 57.87.

The biggest gainer on the NASDAQ was Citrix Systems Inc (NASDAQ:CTXS), which rose 1.57 or 2.23% to 71.96. Earlier this week, activist investors from Elliott Management said Citrix shares can reach $90 if the company imposes some of the changes that the private equity firm has recommended. The worst performer was Ross Stores Inc(NASDAQ:ROST), which closed at $48.55 as its Board of Directors executed a 2-for-1 stock split approved in March. Ross finished just below NVIDIA Corporation (NASDAQ:NVDA), which lost 0.59 or 2.72% to 21.11.

Twitter Inc (NYSE:TWTR) inched up 0.04 or 0.11% to 35.88, one day after CEO Dick Costolo announced that he will step down later next month. Costolo will be replaced by Twitter co-founder Jack Dorsey on an interim basis. Eli Lilly and Company (NYSE:LLY) shares fell 2.37 or 2.74% to 84.22, one day after soaring to a 14-year high amid positive data related to its experimental Alzheimer's drug Solanezumaban. Shares in the pharmaceutical giant are still up more than 25% this year.

Citrix Systems was also the top performer on the S&P 500, ahead of American Airlines Group (MX:AAL) which gained 0.69 or 1.71% to 40.71. Ross Stores also finished as the worst performer on the S&P 500, just below CONSOL Energy Inc (NYSE:CNX), which fell 1.08 or 4.10% to 25.26.

Shares in fast-food restaurant Wingstop soared roughly 60% to $30.59, after debuting with an IPO on Friday of $19 a share.

Additional stock news from Reuters at Investing.com.

Forex

The euro inched up against the dollar on Friday rallying from a minor sell-off one session earlier, as traders prepare for a weekend full of rhetoric in the Greek debt crisis before substantive talks resume next week.

EUR/USD gained 0.0002 or 0.03% to close the week on a strong note at 1.1262. On Friday, the pair wavered between 1.1152 and 1.1295 on a choppy day of trading. For the week, the euro rose roughly 1.4% against its American counterpart after opening on Monday at 1.1112.

The pair likely gained support at 1.0991, the low from June 1 and was met with resistance at 1.1386, the high from June 10.

One day after officials from the International Monetary Fund abruptly broke off talks with Greece in Brussels, Netherlands finance minister Jeroen Dijsselbloem warned that it is practically "unimaginable" for a Greek deal to be completed without the assistance of the IMF. Previously, the head of the euro group of finance ministers indicated that an agreement could be reached at next week's meeting in Luxembourg after Greece reportedly neared an incremental deal with Germany to accept some of the austerity measures proposed by chancellor Angela Merkel in exchange for receiving a portion of the remaining €7.2 billion left in a €240 billion bailout.

On Friday, Greece reportedly submitted a new proposal to its international creditors, according to the Financial Times. The proposal included concessions on debt restructuring, but did not include any pension reform - a major sticking point for the IMF. A day earlier, IMF officials cut tense negotiations short amid a wide rift in pension, tax and financing considerations between the two sides.

Greece is running out of time before the extension of the bailout expires on June 30. The cash-strapped nation also owes a bundled payment of 1.5 billion to the IMF at the end of the month. Dijsselbloem said:

"If the Greek government isn't willing to take difficult measures, even if they're unpopular, then Greece will never be saved."

Stocks among a wide sampling of Greek Banks - the National Bank of Greece, Alpha Bank, Eurobank Ergasias and Piraeus Bank SA - tumbled on Friday, each declining by more than 10% on the session.

In the U.S., the dollar pared earlier gains after reaching session-highs in U.S. morning trading. The University of Michigan in a preliminary report on Friday morning, said its consumer sentiment index rose to 94.6 this month, up from a reading of 90.7 in May. Analysts had expected a modest increase to 91.5. Economists at Michigan also said that its long-term inflation expectations beyond the next 10 years inched down to 2.7% in June from 2.8% a month earlier.

Separately, the U.S. Bureau of Labor Statistics said that its producer price index gained 0.5% in May, slightly above forecasts for a 0.4% increase. The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, reached a session-high of 95.67,

Yields on U.S. 10-Year Treasuries inched up one basis point to 2.39%, while yields on German 10-Year bunds fell five basis points to 0.83%.

CTFC Commitment of Traders

This week speculators were less bearish on the S&P 500, while becoming more bearish on the yen.

cot.2015.june.03

Gold

Gold futures were relatively flat on Friday amid a wavering dollar, as an impasse in longstanding Greek debt negotiations continued to weigh.

On the Comex division of the New York Mercantile Exchange, gold for August delivery fell 0.40 or 0.03% to 1,180.00 a troy ounce. Gold futures traded in a tight range between 1,176.10 and 1,183.50 on the final day of trading this week. For the week, gold rose modestly by less than 1%.

Gold likely gained support at 1,162.10, the low from June 5 and was met with resistance at 1,191.81, the high from June 10.

One day after officials from the International Monetary Fund abruptly broke off talks with Greece in Brussels, Netherlands finance minister Jeroen Dijsselbloem warned that it is practically "unimaginable" for a Greek deal to be completed without the assistance of the IMF. Previously, the head of the euro group of finance ministers indicated that an agreement could be reached at next week's meeting in Luxembourg after Greece reportedly neared an incremental deal with Germany to accept some of the austerity measures proposed by chancellor Angela Merkel in exchange for receiving a portion of the remaining €7.2 billion left in a €240 billion bailout.

Gold is viewed as a safe-haven for investors in periods of severe economic instability.

In the U.S., the dollar pared earlier gains after reaching session-highs in U.S. morning trading. The University of Michigan in a preliminary report on Friday morning, said its consumer sentiment index rose to 94.6 this month, up from a reading of 90.7 in May. Analysts had expected a modest increase to 91.5. Economists at Michigan also said that its long-term inflation expectations beyond the next 10 years inched down to 2.7% in June from 2.8% a month earlier.

Separately, the U.S. Bureau of Labor Statistics said that its producer price index gained 0.5% in May, slightly above forecasts for a 0.4% increase.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, reached a session-high of 95.67, before falling to 94.84 -- down 0.13% on the session.

Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

Silver for July delivery fell 0.108 or 0.68% to 15.852 a troy ounce.

Copper for July delivery gained 0.010 to 2.679 a pound.

Oil

Crude oil futures declined on Friday, as demand for the greenback strengthened ahead of upcoming U.S. consumer sentiment data and as the previous session's upbeat U.S. retail sales report continued to support.

On the New York Mercantile Exchange, crude oil for July delivery hit $60.27 during European early afternoon hours, down 48 cents, or 0.85%. A day earlier, Nymex oil prices dropped 66 cents, or 1.07%, to end at $60.77.

The dollar found support after the U.S. Commerce Department reported on Thursday thatretail sales increased by 1.2% last month, beating expectations for a gain of 1.1%, and that core retail sales, which exclude automobile sales, rose by 1.0% in May, compared to forecasts for a 0.7% increase.

At the same time, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 6 increased unexpectedly by 2,000 to 279,000.

Investors were looking ahead to a preliminary report on U.S. consumer sentiment due later in the day, for further indications on the strength of the economy.

Oil futures were also hit after the IEA also said on Thursday that oil supplies from the Organization of the Petroleum Exporting Countries rose by 50,000 barrels in May from a month earlier to 31.33 million barrels per day, the highest level since August 2012, due to increasing output from Saudi Arabia and Iraq.

In its monthly report, the IEA also said that global oil demand is forecast to increase by 1.4 million barrels a day this year, raising its projection from last month by 300,000 a day.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery retreated by 39 cents, or 0.55%, to trade at $64.72 a barrel. On Thursday, London-traded Brent futures dropped 59 cents, or 0.90%, to settle at $65.11.

The spread between the Brent and the WTI crude contracts stood at $4.45 a barrel.

Natural Gas (Thursday Report)

Natural gas futures held on to modest losses on Thursday, after data showed that U.S. natural gas supplies rose broadly in line with market expectations last week.

On the New York Mercantile Exchange, natural gas for delivery in July fell 0.6 cents, or 0.22%, to trade at $2.885 per million British thermal units during U.S. morning hours. Prices were at around $2.891 prior to the release of the supply data.

Futures were likely to find support at $2.624 per million British thermal units, the low from June 8, and resistance at $3.017, the high from May 22.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended June 5 rose by 111 billion cubic feet, broadly in line with expectations for an increase of 112 billion and following a build of 132 billion cubic feet in the preceding week.

Supplies rose by 109 billion cubic feet in the same week last year, while the five-year average change is an increase of 89 billion cubic feet.

Total U.S. natural gas storage stood at 2.344 trillion cubic feet as of last week. Stocks were 753 billion cubic feet higher than last year at this time and 44 billion cubic feet above the five-year average of 2.300 trillion cubic feet for this time of year.

A day earlier, natural gas prices hit $2.922, the most since May 22, before closing at $2.891, up 4.5 cents, or 1.58% as forecasts for late this week and early next week turned warmer, boosting near-term demand expectations for the heating fuel.

Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.

Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.









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