by Investing.com Staff, Investing.com
U.S stocks rise for fourth week on sentiment data; Dow gains 0.80%.
U.S. stocks rose on Friday, ending higher for a fourth consecutive week after a 
consumer sentiment barometer beat expectations.
At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.80%, the S&P 500 index ended up 0.95%, while the Nasdaq Composite index rose 0.97%.
The Thomson Reuters/University of Michigan’s preliminary consumer sentiment index rose to 83.7 in May from 76.4 in April, surging past expectations for a rise to 78.0.
The University of Michigan also said its inflation expectations for this month remained unchanged at 3.1%.
The news sent stocks wiping out losses stemming from comments from Federal Reserve officials, who signaled that stimulus programs won’t stick around longer due to disappointing economic indicators.
Federal Reserve Bank of San Francisco President John Williams said Thursday that monetary authorities may begin to unwind stimulus programs this summer and possibly end such policies by year end.
Philadelphia Fed President Charles Plosser, a known inflation hawk, added separately that the Fed should consider scaling back the program next month.
The Fed is currently buying USD85 billion in assets from banks a month, a monetary stimulus tool known as quantitative easing that weakens the greenback and floods the economy with liquidity to spur recovery and job demand.
Stocks rise as a side effect to such policies
Leading Dow Jones Industrial Average performers included JPMorgan Chase, up 2.57%, Boeing, up 2.40%, and United Technologies, up 2.34%.
The Dow Jones Industrial Average’s worst performers included Pfizer, down 0.96%, Wal-Mart, down 0.90%, and Merck, down 0.82%.
European indices, meanwhile, finished higher.
After the close of European trade, the EURO STOXX 50 rose 0.40%, France’s CAC 40 rose 0.56%, while Germany’s DAX 30 finished up 0.34%. Meanwhile, in the U.K. the FTSE 100 finished up 0.53%.
The dollar rose against most of its peers in U.S. trading on Friday after a widely followed consumer sentiment gauge beat expectations earlier, one day after Federal Reserve officials said stimulus programs may begin winding down this year.
Stimulus measures, such as the Fed’s monthly USD85 billion bond-buying program, weaken the greenback by flooding the economy full of liquidity to keep interest rates low and encourage investing and hiring.
Weak indicators released in the U.S. earlier this week had markets betting that such policies will stay in place possibly into next year to keep the economy going before it can stand on its own.
In U.S. trading on Friday, EUR/USD was down 0.42% at 1.2829.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.65% at 1.5170.
The dollar was up against the yen, with USD/JPY up 0.94% at 103.22, and up against the Swiss franc, with USD/CHF trading up 0.87% at 0.9732.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.91% at 1.0285, AUD/USD down 0.74% at 0.9736 and NZD/USD trading down 1.07% at 0.8068.
Canada’s consumer price index contracted 0.2% in April from March, defying expectations for a 0.1% gain.
The country’s core CPI, stripped of volatile food and energy costs, rose 0.1%, less than market expectations for a 0.2% gain, sparking talk the Bank of Canada has room to trim interest rates if need be.
The Canadian dollar was down against the euro and up against the yen, with EUR/CAD up 0.45% and trading at 1.3190 and CAD/JPY up 0.03% at 100.36.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.58% at 84.39.
Gold prices dropped in U.S. trading on Friday after a consumer sentiment gauge beat expectations one day after Federal Reserve authorities put to rest talk the U.S. central bank may delay dismantling stimulus programs.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were down 1.86% at USD1,361.05 a troy ounce in U.S. trading on Friday, up from a session low of USD1,357.85 and down from a high of USD1,391.25 a troy ounce.
Gold futures were likely to test support USD1,347.50 a troy ounce, the low from April 18, and resistance at USD1,444.15, Tuesday’s high.
The Thomson Reuters/University of Michigan’s preliminary consumer sentiment index rose to 83.7 in May from 76.4 in April, surging past expectations for a rise to 78.0.
The University of Michigan also said its inflation expectations for this month remained unchanged at 3.1%.
The numbers came a day after Federal Reserve Bank of San Francisco President John Williams said that monetary authorities may begin to unwind stimulus programs this summer and possibly end such policies by year end.
Philadelphia Fed President Charles Plosser, a known inflation hawk, added separately that the Fed should consider scaling back accommodative policies next month.
Monetary stimulus tools, such as low interest rates, dovish language and the Fed’s monthly USD85 billion asset-purchasing program, weaken the dollar to spur recovery.
Weak industrial output, inflation data and other economic indicators had many investors betting in recent sessions that the Fed may prolong dismantling stimulus programs, which pressured the dollar lower until Friday’s data broke and gave the greenback room to rise.
Gold and the dollar tend to trade inversely from one another.
Elsewhere on the Comex, silver for July delivery was down 1.49% at USD22.322 a troy ounce, while copper for July delivery was up 0.73% and trading at USD3.318 a pound.
Oil prices were up in U.S. trading on Friday though off earlier highs after a widely watched barometer on consumer sentiment far exceeded market expectations.
The data rekindled hopes that the U.S. economy continues to recover and will demand more fuels and energy going forward.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June traded up 0.33% at USD95.47 a barrel on Friday, off from a session high of USD96.42 and up from an earlier session low of USD94.80.
Weak industrial output, inflation data and other economic indicators had many investors betting in recent sessions that the Fed may prolong dismantling stimulus programs, which pressured the
dollar lower until Friday’s data broke, though the dollar was up in U.S. trading on Friday.
A stronger greenback often makes oil a less attractive commodity in dollar-denominated exchanges, especially in the eyes of investors holding other currencies.
Elsewhere on the ICE Futures Exchange, Brent oil futures for July delivery were up 0.40% at USD104.19 a barrel, up USD8.72 from its U.S. counterpart.
Natural gas prices edged higher on Friday on weather reports for a late-season cool snap sweeping across the northern reaches U.S., though gains were slight on sentiments milder temperatures will quickly follow.
On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD3.963 per million British thermal units, up 0.80%.
The commodity hit a session low of USD3.914 and a high of USD3.977.
Prices rose on talk of cooler temperatures sweeping across parts of the eastern U.S. though gains were somewhat muted, as milder temperatures were expected to quickly return.
Milder weather tends to send gas prices falling, while colder and hotter temperatures hike demand for heating and air conditioning, respectively, and send prices rising as demand picks up in the nation’s thermal power plants.
Bargain hunters also snapped up nicely priced positions in wake of Thursday’s bearish 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 May 10 rose by 99 billion cubic feet, above expectations for an increase of 95 billion cubic feet.
Inventories rose by 30 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 69 billion cubic feet.
Total U.S. natural gas storage stood at 1.964 trillion cubic feet as of last week. Stocks were 694 billion cubic feet less than last year at this time and 83 billion cubic feet below the five-year average of 2.047 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 105 billion cubic feet below the five-year average, following net injections of 55 billion cubic feet.
Stocks in the Producing Region were 29 billion cubic feet below the five-year average of 825 billion cubic feet after a net injection of 31 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June were up 0.85% and trading at USD95.97 a barrel, while heating oil futures for June delivery were up 0.74% at USD2.9295 per gallon.
