Investing.com Weekly Wrap-Up 18 September 2015

September 18th, 2015
in contributors, syndication, forex

U.S. stocks lower at close of trade; Dow Jones Industrial Average down 1.74%

by Investing.com Staff, Investing.com

U.S. stocks were lower after the close on Friday, as losses in the Oil & Gas, Industrials and Basic Materials sectors led shares lower.

At the close in NYSE, the Dow Jones Industrial Average lost 1.74%, while the S&P 500index fell 1.61%, and the NASDAQ Composite index lost 1.36%.

The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 4.68% to 22.13.

Follow up:

The best performers of the session on the Dow Jones Industrial Average were Nike Inc (NYSE:NKE), which fell 0.19% or 0.22 points to trade at 115.05 at the close. Meanwhile, Apple Inc (NASDAQ:AAPL) fell 0.41% or 0.47 points to end at 113.45 and Procter & Gamble Company (NYSE:PG) was down 0.43% or 0.30 points to 69.94 in late trade.

The worst performers of the session were Merck & Company Inc (NYSE:MRK), which fell 3.39% or 1.83 points to trade at 52.13 at the close. Caterpillar Inc (NYSE:CAT) declined 2.97% or 2.20 points to end at 71.86 and Goldman Sachs Group Inc (NYSE:GS) was down 2.96% or 5.51 points to 180.94.

The top performers on the S&P 500 were Chesapeake Energy Corporation (NYSE:CHK) which rose 4.07% to 8.96, Bristol-Myers Squibb Company (NYSE:BMY) which was up 3.46% to settle at 64.34 and AbbVie Inc (NYSE:ABBV) which gained 2.27% to close at 61.220.

The worst performers were Freeport-McMoran Copper & Gold Inc (NYSE:FCX) which was down 9.71% to 10.88 in late trade, Diamond Offshore Drilling Inc (NYSE:DO) which lost 9.43% to settle at 20.18 and Transocean Ltd (NYSE:RIG) which was down 9.26% to 14.31 at the close.

The top performers on the NASDAQ Composite were Lilis Energy Inc (NASDAQ:LLEX) which rose 408.06% to 3.150, RLJ Entertainment Inc (NASDAQ:RLJE) which was up 279.83% to settle at 1.650 and TigerLogic Corporation (NASDAQ:TIGR) which gained 270.37% to close at 1.000.

The worst performers were Sfx Enterta (NASDAQ:SFXE) which was down 28.67% to 0.44 in late trade, Medovex Corp (NASDAQ:MDVX) which lost 26.00% to settle at 2.59 andPayment Data Systems Inc (NASDAQ:PYDS) which was down 24.87% to 2.84 at the close.

Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1923 to 623 and 3 ended unchanged; on the Nasdaq Stock Exchange, 1660 fell and 920 advanced, while 31 ended unchanged.

Shares in Diamond Offshore Drilling Inc (NYSE:DO) fell to 5-year lows; losing 9.43% or 2.10 to 20.18. Shares in Caterpillar Inc (NYSE:CAT) fell to 3-years lows; losing 2.97% or 2.20 to 71.86. Shares in Lilis Energy Inc (NASDAQ:LLEX) rose to 52-week highs; up 408.06% or 2.530 to 3.150. Shares in Sfx Enterta (NASDAQ:SFXE) fell to all time lows; falling 28.67% or 0.18 to 0.44. Shares in TigerLogic Corporation (NASDAQ:TIGR) rose to 52-week highs; gaining 270.37% or 0.730 to 1.000.

Additional stock news from Reuters at Investing.com.

Forex

The dollar erased losses against against the other major currencies in quiet trade on Friday, as it recovered from the Federal Reserve's decision to hold interest rates this month.

EUR/USD dropped 0.52% to 1.1375, after rising to four-week highs of 1.1460 earlier in the session.

The dollar had weakened broadly after the Fed kept interest rates unchanged on Thursday, but losses were limited as the central bank left open the possibility of a rate hike later this year.

Speaking after the rate statement, Fed Chair Janet Yellen said global economic developments played a major part in the central bank's decision.

In deciding when to raise interest rates, the Fed repeated it wanted to see "some further improvement in the labor market" and be "reasonably confident" that inflation will increase.

The dollar was lower against the yen, with USD/JPY down 0.15% at 119.82.

Earlier Friday, the minutes of the Bank of Japan's August policy meeting revealed that the central bank must be vigilant to the risk of a decline in exports from a prolonged slowdown in China and other emerging economies.

Board members also said that the weakness in Japan's output and exports was temporary.

Elsewhere, the dollar was steady against the pound and the Swiss franc, with GBP/USD at 1.5595 and with USD/CHF at 0.9597.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.63% at 0.7220 and with NZD/USD advancing 0.91% to 0.6405.

Meanwhile, USD/CAD retreated 0.60% to trade at one-month lows of 1.3102.

In Canada, data on Friday showed that the consumer price index was flat last month, compared to expectations for a 0.1% uptick. On a yearly basis, consumer prices rose 1.3% in August, in line with expectations.

Core CPI, which excludes the eight most volatile items, gained 0.2% in August, as exected, and increased by 2.1% on a yearly basis.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.15% at 94.79, off three-and-a-half week lows of 94.20 hit earlier in the day.

CTFC Commitment of Traders

Speculators this week were more bearish on the euro, yen and the S&P 500 and less bearish on the Australian dollar. Bullishness of gold pulled back significantly.

cot.2015.sep.18

Gold

Gold futures surged to its highest level in more than two weeks, as traders digested dovish comments from the Federal Reserve suggesting that drastic improvements are needed in the global economy before the U.S. central bank lifts its benchmark interest rate for the first time in nearly a decade.

On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a broad range wavered between a session low of $1,126.90 and a high of $1,141.20 an ounce, reaching its highest level since September 1. On Friday, gold extended overnight gains from the Asian session when it added more than $10 an ounce, after the Fed held short-term interest rates at its current level between zero and 0.25%.

At the close of trading, gold settled at $1,137.30, up $20.30 or 1.82% on the session. The precious metal also enjoyed one of its strongest weeks of the year, jumping by nearly 3% over the five-day stretch.

Gold likely gained support at $1,104.10, the low from Sept. 14 and was met with resistance at $1,169.00, the high from Aug. 24.

Investors continued to react to a relatively dovish statement from the Federal Open Market Committee on Thursday, which voted to leave its benchmark Federal Funds Rate unchanged, after citing broad weakness in the global economy. In the September monetary policy statement, the FOMC reiterated that it would like to see improvements in the labor market and signals that inflation is moving toward its long-term targeted goal of 2% inflation before it raises rates for the first time since 2006. Still, 13 of the 17 members present at the meeting predicted that the FOMC will raise the Fed Funds Rate by at least 0.25% by the end of the year.

Despite expressing significant concerns with the pace of economic growth globally, Fed chair Janet Yellen appeared more optimistic with the developments of the U.S. economy since the FOMC last met in July. The U.S. labor market, she said, is moving closer to full employment, which creates upward pressure on inflation.

The Fed is expected to keep a close eye on the September national employment report for indications of continued wage growth. While non-farm average hourly earnings ticked up by 0.3% in August from the previous month, they were up only 2.2% from their level in August, 2014. On an inflation-adjusted basis, wage gains have remained virtually flat over the last five years. Over the second quarter, U.S. labor costs inched up 0.2%, recording their smallest increase in more than 30 years.

Gold, which is not attached to dividends or interest rates, struggles to compete with high-yield bearing assets in periods of rising rates.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose more than 0.30% to an intraday high of 94.98, before falling back slightly to 94.89. With several hours left in the trading week, the index was on pace to close down by approximately 0.5% on the week.

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

Silver for December delivery gained 0.211 or 1.41% to 15.195 an ounce.

Copper for December delivery fell 0.066 or 2.66% to 2.386 a pound.

Oil

U.S. crude futures fell sharply on Friday erasing massive gains from earlier in the week, even as oil rig totals nationwide extended a streak of minor declines.

On the New York Mercantile Exchange, WTI crude for October delivery traded in a broad range between $44.25 and $47.03 a barrel, before settling at 44.73, down 2.17 or 4.66% on the day. Energy traders locked into profits from Wednesday's session when crude futures surged nearly 6% to close over $47 a barrel, their highest closing level in the month of September. For the week, Texas Long Sweet futures were relatively flat, falling by 0.40% or less than a quarter a barrel.

On the Intercontinental Exchange (ICE), brent crude for November delivery wavered between $47.16 and $49.75 a barrel, before closing at 47.55, down 1.55 or 3.13% on the session. Brent crude future fell by nearly 3% on the week, amid a volatile stretch that saw it close by more than 3% in a positive or negative direction on three different sessions.

Meanwhile, the spread between the international and U.S. domestic benchmarks of crude stood at 2.91, above Thursday's level of 2.18 at the close of trading. Earlier this week, the spread dropped to its lowest level in eight months.

Oil services firm Baker Hughes (NYSE:BHI) said in its weekly rig count on Friday that U.S. oil rigs last week fell by eight to 644, moving lower for the third straight week. U.S. oil rigs nationwide are still down substantially from their level last fall when they peaked above a total of 1,600. The count wavered throughout the summer after falling for 25 consecutive weeks earlier this year.

Energy traders remain concerned that prices could continue to fall, amid a global market oversaturated by a glut of supply. Their worries were not assuaged in spite of a significant draw last week when U.S. crude stockpiles fell by 2.1 million to 455.9 million barrels. Despite the decline, inventories still remain near levels not seen for this time of year in at least the last 80 years.

Crude futures are down by more than 50% from its peak above $100 a barrel last summer, after OPEC rattled global energy markets with a strategic decision to keep its production ceiling unchanged. The tactic triggered a protracted battle between the U.S. and OPEC for global market share, causing prices to fall near six-year lows.

The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose more than 0.30% to an intraday high of 94.98, before falling back slightly to 94.85. The index was on pace late Friday afternoon to close down by approximately 0.5% for the week.

Investors continue to digest dovish comments from Federal Reserve chair Janet Yellen on Thursday, after the U.S. central banks held short-term interest rates at record near-zero lows. A rate hike is widely viewed as bullish for the dollar.

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

Natural Gas (Thursday Report)

Natural gas futures edged higher on Thursday, after data showed that U.S. natural gas supplies rose in line with market expectations last week.

On the New York Mercantile Exchange, natural gas for delivery in August was up 0.21% at $2.665 per million British thermal units. Prices were at around $2.670 prior to the release of the supply data.

In its weekly report the Energy Information Administration said natural gas storage in the week ended September 11 rose by 73 billion cubic feet, in line with expectations

Total U.S. natural gas storage stood at 3,334 bcf the EIA said. Stocks were 456 bcf higher than last year at this time and 125 bcf above the five-year average of 3,209 bcf for this time of year.

EIA data shows that power plants account for approximately 32% of gas demand in the U.S.

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









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