Investing.com Weekly Wrap-Up 26 April 2013

by Investing.com Staff, Investing.com

U.S stocks end mixed on soft GDP data; Dow gains 0.08%

U.S. stocks finished Friday mixed as demand for technology and energy concerns partially offset losses sustained when the U.S. government reported that the country’s gross domestic product grew less than expected in the first quarter.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.08%, the S&P 500 index fell 0.18%, while the Nasdaq Composite index slid 0.33%.

Shares in Apple and Hewlett-Packard rose on Friday after investors viewed them as nicely priced and brought their peers up with them albeit in quiet trading session.

Elsewhere, Chevron reported first-quarter earnings that topped expectations and sparked demand for energy companies, though disappointing results from Starbucks and guidance from Amazon dampened spirits as did economic indicators.

Earlier Friday, the Bureau of Economic Analysis revealed in a preliminary report that the U.S. gross domestic product rose 2.5% in the first quarter, missing expectations for a 3.0% increase though an improvement from a 0.4% rise in the previous quarter.

Elsewhere, the Thomson Reuters/University of Michigan’s consumer sentiment index rose to 76.4 in April, from a reading of 72.3 the previous month, beating expectations for an increase to 73.2.

Leading Dow Jones Industrial Average performers included Hewlett-Packard, up 1.89%, Boeing, up 1.44%, and Chevron, up 1.33%.

The Dow Jones Industrial Average’s worst performers included Alcoa, down 1.31%, 3M, down 1.03%, and United Technologies, also down 1.03%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 0.77%, France’s CAC 40 fell 0.79%, while Germany’s DAX 30 finished down 0.23%. Meanwhile, in the U.K. the FTSE 100 finished down 0.25%.

Forex

The U.S. dollar traded largely lower against most major currencies on Friday after U.S. economic growth figures for the first quarter came in less than expected and stoked fears the U.S. economy may be hitting a soft patch.

In U.S. trading on Friday, EUR/USD was up 0.14% at 1.3030.

In the U.S. earlier, the Bureau of Economic Analysis revealed in a preliminary report that the U.S. gross domestic product rose 2.5% in the first quarter, missing expectations for a 3.0% increase though an improvement from a 0.4% rise in the previous quarter.

The news weakened the dollar by fueling sentiments that the Federal Reserve’s monetary stimulus programs will stay in place for longer than expected.

The euro, meanwhile, continued to come under pressure after U.S. investment bank Goldman Sachs said it expected the European Central Bank to trim benchmark interest rates 25 basis points at its monetary policy meeting next Thursday.

The investment bank also cut its 2013 eurozone growth forecast to -0.7% from a previous forecast of -0.5%.

Slumping European industrial output reports, soft service-sector data and eroding business confidence data have many market participants speculating the ECB will move to loosen policy to kick-start recovery.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.34% at 1.5486.

On Thursday, the Office for National Statistics reported that the U.K. gross domestic product expanded 0.3% in the three months to March, beating expectations for a 0.1% gain and avoiding a triple dip recession.

The U.K. economy expanded 0.6% in the first quarter from a year earlier, better than expectations for a 0.3% increase.

The dollar was down against the yen, with USD/JPY down 1.08% at 98.18, and down against the Swiss franc, with USD/CHF trading down 0.23% at 0.9428.

The yen saw demand after the Bank of Japan left interest rates unchanged and made no mention of expanding stimulus programs.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.35% at 1.0165, AUD/USD down 0.12% at 1.0278 and NZD/USD trading down 0.23% at 0.8480.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.42% at 82.55.

The dollar fell against the yen on Friday after the U.S. government reported the world’s largest economy grew less than expected in the first quarter.

In U.S. trading on Friday, USD/JPY was trading at 98.14, down 1.12%, up from a session low of 97.56 and off a high of 99.42.

The pair was likely to find resistance at 99.77, Thursday’s high, and support at 97.56, the earlier low.

Gold

Gold prices fell in U.S. trading on Friday after investors locked in gains and sold for profits.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 0.56% at USD1,453.75 a troy ounce in U.S. trading on Friday, up from a session low of USD1,448.05 and down from a high of USD1,484.75 a troy ounce.

Gold futures were likely to test support USD1,403.55 a troy ounce, Monday’s low, and resistance at USD1,484.75, the earlier high.

Reports of increased physical demand for gold in Asia as well talk of rising demand from central banks pushed up gold prices earlier until investors sold the metal for profits.

U.S. GDP data also hiked up gold prices before profit taking kicked in.

The news weakened the dollar by fueling sentiments that the Federal Reserve’s monetary stimulus programs will stay in place for longer than expected.

Stimulus tools such as the Fed’s monthly USD85 billion bond-buying program weaken the greenback to spur recovery, which makes gold an attractive hedge.

Elsewhere on the Comex, silver for May delivery was down 1.40% at USD23.803 a troy ounce, while copper for May delivery was down 1.84% and trading at USD3.178 a pound.

Oil

Oil prices dropped on Friday after data revealed the U.S. economy grew less than expected in the first quarter.

On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded down 1.03% at USD92.68 a barrel on Friday, off from a session high of USD93.56 and up from an earlier session low of USD92.10.

The U.S. GDP news sent oil prices falling by fanning sentiments that potholes remain on the road to recovery in the U.S., which could demand less fuels and energy than once expected.

The numbers also fanned concerns that the economy will slow even further in the second quarter.

Improved consumer sentiment numbers from the Thomson Reuters/University of Michigan survey were not enough to buoy oil prices.  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 fell in U.S. trading on Friday after meteorological forecasts predicted warm weather patterns to extend across much of the country and cut into the need to heat homes and businesses.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD4.146 per million British thermal units, down 1.30%.

Weather forecasting services predicted the heavily populated eastern half of the U.S. to experience seasonably warm temperatures next week.

Prices have risen in recent weeks due to below-normal temperatures in March and early April.  Gas use typically hits seasonal lows with spring’s mild temperatures before hotter weather increases demand for gas-fired electricity generation to power air conditioning.

Investors quickly looked past Thursday’s rather bullish supply data and sold the commodity to await reports of changing weather patterns.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending April 19 rose by 30 billion cubic feet, below expectations for an increase of 32 billion cubic feet.

Inventories rose by 43 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 50 billion cubic feet.

Total U.S. natural gas storage stood at 1.734 trillion cubic feet as of last week. Stocks were 807 billion cubic feet less than last year at this time and 94 billion cubic feet below the five-year average of 1.828 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 100 billion cubic feet below a five-year average, following net injections of 21 billion cubic feet.

Stocks in the Producing Region were 53 billion cubic feet below a five-year average of 767 billion cubic feet after a net injection of 11 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June were down 0.69% and trading at USD92.99 a barrel, while heating oil futures for May delivery were down 0.32% at USD2.8923 per gallon.