Investing.com Weekly Wrap-Up 19 April 2013

by Investing.com Staff, Investing.com

U.S stocks end up on earnings in quiet session; Dow gains 0.07%

U.S. stocks closed higher on Friday in quiet trading, lead mainly by better-than-expected earnings.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.07%, the S&P 500 index rose 0.88%, while the Nasdaq Composite index rose 1.25%.

Tech giants Google and Microsoft along with financial services company Capital One released  first-quarter earnings that topped many expectations and sparked a buying spree on Friday.

Trading was light, as most investors spent the day tracking events in Boston, where a manhunt for a suspected Boston Marathon bomber was underway.

Data released Thursday capped gains.

The Federal Reserve’s Philly manufacturing index came in at 1.3 for April compared to 2.0 in March, defying expectations for a 3.0 reading.

The numbers came days after a similar Fed index for New York State also failed to live up to market expectations and fueled talk the U.S. central bank won’t rush to dismantle stimulus programs that weaken the greenback to spur investing, job creation and recovery.

Elsewhere in the U.S., the Department of Labor reported earlier that the number of individuals filing for initial jobless benefits last week rose by 4,000 to 352,000, surpassing market calls for an increase of 2,000 to 350,000.

Jobless claims for the preceding week were revised up by 2,000 to 348,000.

Leading Dow Jones Industrial Average performers included Microsoft, up 3.47%, American Express, up 3.37%, and Verizon Communications, up 2.63%.

The Dow Jones Industrial Average’s worst performers included IBM, down 8.30%, General Electric, down 4.01%, and Hewlett-Packard, down 3.17%.

European indices, meanwhile, finished largely higher.

After the close of European trade, the EURO STOXX 50 rose 0.77%, France’s CAC 40 rose 1.46%, while Germany’s DAX 30 finished down 0.18%. Meanwhile, in the U.K. the FTSE 100 rose 0.69%.

Forex

The U.S. dollar traded mixed to higher against most major currencies on Friday after a Japanese official said the country has not faced opposition among its G20 allies over its loose monetary policies.

The greenback traded lower against the euro after a key ECB policymaker said rate cuts will take place only if economic indicators worsen. 

In U.S. trading on Friday, EUR/USD was up 0.08% at 1.3061.

ECB Governing Council member Jens Weidmann told the Wall Street Journal earlier this week that monetary authorities could cut interest rates if economic and inflation data indicated that policy loosening may be warranted, though he added that monetary policy is already quite expansionary.

By Friday, however, Weidmann reiterated that rate cuts were possible but only if data worsened, which gave investors breathing room to take up positions in the single currency and other higher-yielding assets.

Elsewhere, official data showed that Germany’s producer price index fell 0.2% in March, disappointing expectations for a 0.1% rise and following a 0.1% slip the previous month.

The dollar, however, remained higher against the yen.

Japanese Finance Minister Taro Aso said earlier that Tokyo’s stimulus policies have not run into opposition among the country’s G20 counterparts.

The Bank of Japan has launched massive monetary easing measures that have weakened the yen to spur more economic growth.

Aso’s comments weakened the yen and sparked dollar demand by fueling sentiments that further easing may be possible in Japan given that the country’s move to looser monetary policy hasn’t met opposition abroad.

While Japan’s policies have been loose and have weakened the currency, the country still battles deflationary pressures, which justifies central bank action.

Elsewhere, the dollar also continued to face pressure in wake of Thursday data showing that manufacturing in the Philadelphia area of the U.S. disappointed.

The Federal Reserve’s Philly manufacturing index fell to 1.3 in April from 2.0 in March, defying expectations for a 3.0 reading.

The numbers came days after a similar Fed index for New York State also failed to live up to market expectations and fueled talk the U.S. central bank won’t rush to dismantle stimulus programs that weaken the greenback to spur investing, job creation and recovery.

The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.34% at 1.5227.

The dollar was up against the yen, with USD/JPY up 1.47% at 99.59, and up against the Swiss franc, with USD/CHF trading up 0.08% at 0.9334.

The dollar was mixed against its counterparts in Canada, Australia and New Zealand, with USD/CAD up 0.04% at 1.0263, AUD/USD down 0.16% at 1.0285 and NZD/USD trading up 0.19% at 0.8429.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.19% at 82.85.

Gold

Gold prices rose in U.S. trading on Friday on reports of rising physical demand in Asia, while a firming euro also allowed for modest gains in a quiet session.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 0.25% at USD1,395.95 a troy ounce in U.S. trading on Friday, up from a session low of USD1,385.65 and down from a high of USD1,424.55 a troy ounce.

Gold futures were likely to test support USD1,337.25 a troy ounce, Thursday’s low, and resistance at USD1,424.55, the earlier high.

Reports of rising demand for physical gold sent futures rising on Friday as did the euro’s gains against the dollar.  Gold and the dollar tend to trade inversely from one another.

Elsewhere on the Comex, silver for May delivery was down 1.19% at USD22.968 a troy ounce, while copper for May delivery was down 1.71% and trading at USD3.150 a pound.

Oil

Oil prices rose on Friday tracking the euro’s modest gains against the dollar amid a quiet session that brought in bargain hunters who viewed the commodity as oversold.

On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded up 0.40% at USD88.35 a barrel on Friday, off from a session high of USD89.05 and up from an earlier session low of USD87.97

Oil prices plunged earlier this week after Chinese growth and industrial output data missed expectations.

A decision by the International Monetary Fund to trim its global growth forecast for this year also pushed oil down.  But By Friday, the euro rose against the dollar after a key European Central Bank member toned down dovish comments and this buoyed the dollar price for oil.

Oil also rose amid sentiments that prices fell too far during recent selloffs, which brought in the bottom fishers.

Elsewhere on the ICE Futures Exchange, Brent oil futures for June delivery were up 0.39% at USD99.52 a barrel, up USD11.17 from its U.S. counterpart.

Natural Gas

Natural gas futures moved lower in U.S. trading on Friday after weather forecasting services indicated warmer temperatures returning to a good portion of the U.S.

On the New York Mercantile Exchange, natural gas futures for delivery in May traded at USD4.393 per million British thermal units, down 0.19%.

The commodity hit a session low of USD4.364 and a high of USD4.421.

While parts of the central U.S. may see below-normal temperatures in the coming days, the West Coast, eastern half of the U.S. will see a warming trend, which sent natural gas prices falling on Friday.

Natural gas prices can be very sensitive to weather reports.

About half of U.S. households use gas for heating purposes, according to Energy Department data.

Profit taking also kept prices lower after investors locked in gains on Thursday’s rally, the product of bullish supply data.

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 April 12 rose by 31 billion cubic feet, below expectations for an increase of 34 billion cubic feet.

Inventories increased by 21 billion cubic feet in the same week a year earlier, while the five-year average change for the week represented a build of 39 billion cubic feet.

Typically this time of year, stockpiles begin to climb as milder spring temperatures curb demand for natural gas.

Total U.S. natural gas storage stood at 1.704 trillion cubic feet as of last week. Stocks were 794 billion cubic feet less than last year at this time and 74 billion cubic feet below the five-year average of 1.778 trillion cubic feet for this time of year.

In the East Region, stocks were 93 billion cubic feet below the five-year average, following net injections of 19 billion cubic feet.

Stocks in the Producing Region were 48 billion cubic feet below the five-year average of 751 billion cubic feet after a net injection of 13 billion cubic feet.