Investing.com Weekly Wrap-Up 15 March 2013

by Investing.com Staff, Investing.com

U.S. stocks fall from record high on weak sentiment data; Dow dips 0.17%

U.S. stocks fell from record highs on Friday after consumer sentiment data came in much weaker than expected, wiping out a multi-session rally fueled by hopes that U.S. economy is poised for more robust recovery.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.17%, the S&P 500 index ended down 0.16%, while the Nasdaq Composite index fell 0.30%.

The Thomson Reuters/University of Michigan’s preliminary consumer sentiment reading for March came in at 71.8, the lowest since December of 2011 and well below analysts’ calls for a 78.0 reading.

The numbers sparked a round of profit taking that sent stocks falling after a 10-day winning streak that saw that Dow Jones Industrial Average finish at record highs on multiple occasions.

Solid industrial production numbers and inflation figures failed to quell growing concerns that the stock-market rally is running out of steam.

In the U.S., the country’s consumer price index rose 0.7% in February from January, more than market calls for a 0.5% increase.

The U.S. core consumer price index, which is stripped of volatile food and energy costs, rose 0.2% in February, in line with expectations.

The numbers met expectations, though output in the country’s factories, mines and utilities beat forecasts last month.

The Federal Reserve reported earlier that U.S. industrial production rose by 0.7% in February after contracting 0.1% in January.

Analysts were expecting industrial production to rise 0.4% last month, though the session remained largely bearish throughout the day.

Leading Dow Jones Industrial Average performers included Bank of America, up 3.96%, Boeing, up 2.15%, and Cisco Systems, up 1.57%.

The Dow Jones Industrial Average’s worst performers included JPMorgan, down 0.98%, Home Depot, down 1.54%, and AT&T, down 1.30%.

European indices, meanwhile, largely mixed.

After the close of European trade, the EURO STOXX 50 fell 0.69%, France’s CAC 40 fell 0.71%, while Germany’s DAX 30 finished down 0.19%. Meanwhile, in the U.K. the FTSE 100 finished down 0.61%.

Forex

The U.S. dollar fell against most major currencies on Friday after modest inflation data sparked a selloff by fueling sentiments that the Federal Reserve will not rush to unwind stimulus measures that weaken the greenback by design.

In U.S. trading on Friday, EUR/USD was up 0.39% at 1.3056.

In the U.S., the country’s consumer price index rose 0.7% in February from January, more than market calls for a 0.5% increase.

The U.S. core consumer price index, which is stripped of volatile food and energy costs, rose 0.2% in February, in line with expectations.

Investors viewed inflation rates as contained, and sold the dollar for profits on sentiments that while the Federal Reserve will eventually wind down stimulus measures one day, the U.S. central bank won’t rush to tighten policy in the near future.

Falling consumer sentiment numbers cemented such views.  The dollar also saw downward pressure after E.U. policymakers took a more relaxed approach to austerity measures.

At a summit earlier, E.U. leaders granted countries such as France, Spain and Portugal extra time to narrow deficits, which gave the single currency room to rise.

Elsewhere, E.U. and International Monetary Fund officials were outlining a financial assistance package for Cyprus, which further pushed up the single currency as did data on both sides of the Atlantic.

Solid U.S. industrial output data failed to buttress the greenback significantly.  The Federal Reserve reported earlier that U.S. industrial production rose by 0.7% in February after contracting 0.1% in January.  Analysts were expecting industrial production to rise 0.4% last month.

The greenback, meanwhile, was flat against the pound, with GBP/USD trading down 0.02% at 1.5078.

The dollar was down against the yen, with USD/JPY trading down 0.67% at 95.47, and down against the Swiss franc, with USD/CHF trading down 0.70% at 0.9406.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.26% at 1.0194, AUD/USD up 0.21% at 1.0407 and NZD/USD trading up 0.58% at 0.8268.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.46% at 82.47.

The dollar fell against the yen on Friday after U.S. inflation data convinced investors the Federal Reserve won’t rush to unwind monetary stimulus measures that weaken the greenback by design.

In U.S. trading on Friday, USD/JPY was trading at 95.36, down 0.78%, up from a session low of 95.08 and off a high of 96.28.

The pair was likely to find resistance at 96.28, the earlier high, and support at 95.08, the earlier low.

The yen, meanwhile was up against the pound and up against the euro, with GBP/JPY down 0.73% and trading at 143.87 and EUR/JPY trading down 0.41% at 124.47.

Gold

Gold prices rose in U.S. trading on Friday, after European Union policymakers relaxed budgetary deficit targets, which sent the euro gaining against the dollar, often a recipe for climbing gold prices.

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

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were up 0.10% at USD1,592.40 a troy ounce in U.S. trading on Friday, up from a session low of USD1,587.60 and down from a high of USD1,597.80 a troy ounce.

Gold futures were likely to test support USD1,575.80 a troy ounce, Thursday’s low, and resistance at USD1,598.00, Wednesday’s high.

Elsewhere on the Comex, silver for May delivery was flat at USD28.807 a troy ounce, while copper for May delivery was down 0.43% and trading at USD3.521 a pound.

Oil

Surging production in U.S. factories, mines and utilities pushed oil prices higher on Friday on hopes a more robust U.S. economy will demand more energy and fuels going forward.

Soft consumer sentiment figures capped the commodity’s gains, however.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded up 0.41% at USD93.41 a barrel on Friday, off from a session high of USD93.82 and up from an earlier session low of USD93.01.

The dollar weakened against other currencies.  A cheaper greenback makes oil a nicely priced asset in dollar-denominated exchanges, especially in the eyes of investors holding other currencies.

Elsewhere on the ICE Futures Exchange, Brent oil futures for May delivery were up 0.80% at USD109.83 a barrel, up USD16.42 from its U.S. counterpart.

Natural Gas

Natural gas futures extended Thursday’s gains into Friday as investors went long on the commodity after official data revealed supplies plunged well beyond market expectations last week.

On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD3.853 per million British thermal units, up 1.09%.

The commodity hit a session low of USD3.822 and a high of USD3.924.

The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ended March 8 fell by 145 billion cubic feet, compared to expectations for a drop of 134 billion cubic feet.

Inventories fell by 66 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 74 billion cubic feet.

Total U.S. natural gas storage stood at 1.938 trillion cubic feet as of last week. Stocks were 440 billion cubic feet less than last year at this time and 198 billion cubic feet above the five-year average of 1.740 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 38 billion cubic feet above the five-year average, following net withdrawals of 92 billion cubic feet.

Stocks in the Producing Region were 85 billion cubic feet above the five-year average of 684 billion cubic feet after a net withdrawal of 48 billion cubic feet.

Elsewhere, weather forecasts for a chilly end to spring in the U.S. kept prices elevated as well on Friday.

The U.S. heating season from November through March is the peak demand period for U.S. gas consumption.  Nearly 50% of all U.S. households use gas for heating.