Investing.com Weekly Wrap-Up 03 May 2013

by Investing.com Staff, Investing.com

U.S stocks gain on strong April jobs report

A much stronger-than-expected U.S. April jobs report sent stocks gaining on Friday, with the Dow Jones Industrial Average topping the 15,000 mark briefly while the S&P 500 index closed above 1,600.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.96%, the S&P 500 index rose 1.05%, while the Nasdaq Composite index rose 1.14%.

The Bureau of Labor Statistics reported earlier that the U.S. economy added 165,000 nonfarm payrolls in April, up from 138,000 in March, whose figure was revised up from 88,000.

April’s figures far outpaced analysts’ forecasts for a 145,000 figure, while February’s figures were revised to 332,000 from 268,000.

The headline unemployment rate ticked down to 7.5% in April from 7.6% in March.

The numbers fueled demand for risk-on asset classes such as stocks, which enticed investors out of the safety of the dollar and sparked a rally on Wall Street

Elsewhere, the Institute for Supply Management reported that its April non-manufacturing index fell to 53.1 in April from 54.4 in March, missing market calls for a 54.0 reading, the slowest pace of expansion since July of last year.

Still, a reading over 50 indicates expansion, which gave stocks further room to rise.

Leading Dow Jones Industrial Average performers included Caterpillar, up 3.24%, Alcoa, up 2.01%, and Boeing, up 1.67%.

The Dow Jones Industrial Average’s worst performers included Pfizer, down 1.09%, JPMorgan & Chase, down 1.04%, and UnitedHealth Group, down 0.94%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 1.65%, France’s CAC 40 rose 1.40%, while Germany’s DAX 30 finished up 2.02%. Meanwhile, in the U.K. the FTSE 100 finished up 0.94%.

Forex

The U.S. dollar weakened against most major currencies on Friday after the Department of Labor reported that the economy picked up more jobs than expected in April and upwardly revised previous months’ figures.

In U.S. trading on Friday, EUR/USD was up 0.35% at 1.3111.

The greenback, meanwhile, was down against the pound, with GBP/USD trading up 0.20% at 1.5564.

The dollar was up against the yen, with USD/JPY up 1.13% at 99.06, and up against the Swiss franc, with USD/CHF trading up 0.08% at 0.9356.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.27% at 1.0078, AUD/USD up 0.69% at 1.0320 and NZD/USD trading up 0.58% at 0.8544.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.14% at 82.17.

The dollar firmed against the yen on Friday after official U.S. data revealed the economy added many more jobs in April than markets were expecting.

In U.S. trading on Friday, USD/JPY was trading at 99.11, up 1.18%, up from a session low of 97.91 and off a high of 99.27.

The pair was likely to find resistance at 99.77, the high from April 24, and support at 97.02, Tuesday’s low.

The yen was down against the pound and down against the euro, with GBP/JPY up 1.43% and trading at 154.31 and EUR/JPY trading up 1.59% at 130.00.

Gold

Gold prices edged lower on Friday after the U.S. government revealed its economy added more jobs than expected in April.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 0.09% at USD1,466.25 a troy ounce in U.S. trading on Friday, up from a session low of USD1,457.35 and down from a high of USD1,487.15 a troy ounce.

Gold futures were likely to test support USD1,4393.75 a troy ounce, Wednesday’s low, and resistance at USD1,487.15, the earlier high.

The employment numbers allayed recent concerns that the U.S. economy may be hitting a soft patch and prompt the Federal Reserve to keep stimulus programs in place longer than once anticipated.

Monetary stimulus tools, especially the Fed’s USD85 billion monthly bond-buying program, tend to weaken the dollar to spur recovery.

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

Also depressing gold prices, February’s employment figures were revised to 332,000 from 268,000.

Talk of rising physical demand in Asia and a recent European Central Bank rate cut supported gold and curbed the yellow metal’s losses.

Elsewhere on the Comex, silver for July delivery was up 0.65% at USD23.985 a troy ounce, while copper for July delivery was up 6.26% and trading at USD3.299 a pound.

Oil

Oil prices shot up on Friday after data revealed the U.S. economy created far more jobs in April than expected.

On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded up 1.95% at USD95.82 a barrel on Friday, off from a session high of USD96.00 and up from an earlier session low of USD93.56.

Elsewhere on the ICE Futures Exchange, Brent oil futures for June delivery were up 1.58% at USD104.47 a barrel, up USD8.65 from its U.S. counterpart.

Natural Gas

Natural gas futures rose on Friday as bargain hunters snapped up nicely priced positions after official data released on Thursday’s revealed U.S. supplies rose way more than expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD4.043 per million British thermal units, up 0.43%.

The commodity hit a session low of USD3.979 and a high of USD4.059.

The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ending April 26 rose by 43 billion cubic feet, well above expectations for an increase of 28 billion cubic feet.

The numbers sent gas prices nose-diving down by close to 7% on Thursday before bottom-fishers jumped in on Friday and stabilized the sell-off

Inventories rose by 31 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 67 billion cubic feet.

Total U.S. natural gas storage stood at 1.777 trillion cubic feet as of last week. Stocks were 795 billion cubic feet less than last year at this time and 118 billion cubic feet below the five-year average of 1.895 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 120 billion cubic feet below the five-year average, following net injections of 18 billion cubic feet.

Stocks in the Producing Region were 52 billion cubic feet below the five-year average of 786 billion cubic feet after a net injection of 20 billion cubic feet.

Markets were expecting supplies to rise at a much lower clip due to persistently cold weather lingering over much of the heavily populated eastern half of the U.S. during March and early April.