by Investing.com Staff, Investing.com
At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.49%, the S&P 500 index rose 0.27%, while the Nasdaq Composite index rose 0.17%.
While many investors expect the Federal Reserve to announce plans to taper its USD85 billion in monthly asset purchases at its Sept. 17-18 meeting, most feel the U.S. central bank will trim that figure only slightly.
Stimulus measures such as asset purchases keep long-term interest rates low and boost stocks in the process, and the Fed is not expected to halt its program altogether but rather, reduce the amount of bonds it buys and keep conditions ripe for further stock-market gains.
Elsewhere, the Thomson Reuters/University of Michigan preliminary U.S. consumer sentiment index fell to 76.8 in September from 82.1 in August, worse than expectations for a decline to 82.0, which kept expectations alive for U.S. monetary policy to remain loose.
Official data, meanwhile, showed that U.S. retail sales rose 0.2% in August, missing expectations for a 0.4% rise after an upwardly revised 0.4% increase the previous month.
Core retail sales, excluding automobiles, rose 0.1% last month, short of expectations for a 0.3% gain after an upwardly revised 0.6% increase in July.
Separate data showed that the U.S. producer price index rose 0.3% in August, more than the expected 0.2% after a flat reading the previous month.
Core producer price inflation, excluding food and energy, was flat last month, compared to expectations for a 0.1% rise, after a 0.1% gain in July.
Leading Dow Jones Industrial Average performers included Intel, up 3.62%, Walt Disney, up 1.85%, and DuPont, up 1.43%.
The Dow Jones Industrial Average’s worst performers included Alcoa, down 0.98%, Johnson & Johnson, down 0.51%, and Home Depot, down 0.36%.
European indices, meanwhile, finished largely higher.
After the close of European trade, the EURO STOXX 50 rose 0.25%, France’s CAC 40 rose 0.19%, while Germany’s DAX 30 finished rose 0.18%. Meanwhile, in the U.K. the FTSE 100 finished down 0.08%.
The dollar softened against most major currencies on Friday as investors avoided the currency to wait for the Federal Reserve to announce its decision on stimulus measures next week, with many betting for policy to remain loose even if he Fed tapers its monthly asset-purchasing program.
Stimulus programs such as the Fed’s monthly USD85 billion in asset purchases keep the dollar weak by driving down long-term interest rates.
In U.S. trading on Friday, EUR/USD was up 0.04% at 1.3304.
Lackluster U.S. economic data and expectations that the Fed may taper security buying slightly next week softened the greenback on Friday.
Meanwhile, euro zone finance ministers were meeting in Vilnius, Lithuania, to discuss reforms to strengthen the region’s banking sector.
On Thursday, the European Parliament approved legislation to allow the European Central Bank to oversee banks in the 17-nation currency bloc. ECB President Mario Draghi said the vote was “a real step forward” in establishing a banking union.
Elsewhere, the greenback was down against the pound, with GBP/USDup 0.46% at 1.5878.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.05% at 81.65.
Gold prices dropped on Friday after investors bet the Federal Reserve next week will announce its intentions to begin tapering its monthly USD85 billion asset-purchasing program.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,313.90 during U.S. afternoon hours, down 1.26%.
Gold prices hit a session low of USD1,304.80 a troy ounce and high of USD1,330.70 a troy ounce.
Gold futures were likely to find support at USD1,272.10 a troy ounce, the low from Aug. 7, and resistance at USD1,416.30, Tuesday’s high.
The December contract settled down 2.43% at USD1,330.60 a troy ounce on Thursday.
Despite soft U.S. data released earlier, consensus continued to build on Friday that the Federal Reserve will announce plans to taper its monthly USD85 billion asset-purchasing program at its Sept. 17-18 policy meeting.
U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held a fresh round of talks on Friday to discuss ways to disarm Syria of its chemical weapons, and while the U.S. says military action is still possible, metals markets concluded such campaigns are less likely.
Syria has agreed to hand over its chemical weapons cache to international control at Russia’s request.
Gold served as a safe-haven asset class during the U.S.-Syrian crisis, though prices have fallen as the prospects of U.S. military strikes have declined.
Elsewhere on the Comex, silver for December delivery was down 1.52% at USD21.813 a troy ounce, while copper for December delivery was down 0.24% and trading at USD3.202 a pound.
Crude oil futures fell on Friday as fears the U.S. may launch military strikes against Syria began to fade as the possibility of a diplomatic solution to the impasse rose, while soft U.S. consumer sentiment numbers pushed down prices as well.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD107.71 a barrel during U.S. trading, down 0.82%.
The October contract settled up 0.97% at USD108.60 a barrel on Thursday.
The commodity hit a session low of USD107.24 and a high of USD108.81.
Meanwhile on the ICE Futures Exchange, Brent oil futures for October delivery were down 0.52% at USD110.95 a barrel, up USD3.24 from its U.S. counterpart.
Natural gas prices extended Thursday’s gains into Friday after official U.S. inventory data revealed the country’s stockpiles rose less than expected last week.
On the New York Mercantile Exchange, natural gas futures for delivery in October traded at USD3.665 per million British thermal units during U.S. trading, up 0.73%.
The October contract settled up 1.99% at USD3.638 per million British thermal units on Thursday.
The commodity hit a session low of USD3.604 and a high of USD3.676.
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 Sept. 6 rose by 65 billion cubic feet, below market expectations for an increase of 66 billion cubic feet.
Inventories increased by 27 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 62 billion cubic feet.
Total U.S. natural gas storage stood at 3.253 trillion cubic feet as of last week. Stocks were 172 billion cubic feet less than last year at this time and 46 billion cubic feet above the five-year average of 3.207 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 114 billion cubic feet below the five-year average, following net injections of 49 billion cubic feet.
Stocks in the Producing Region were 106 billion cubic feet above the five-year average of 993 billion cubic feet after a net injection of 14 billion cubic feet.
Investors also kept a wary eye Tropical Storm Ingrid, which formed in the southwestern Gulf of Mexico though it was poised to make landfall in Mexico.
Tropical weather systems often disrupt production by prompting gas rig operators to evacuate offshore facilities.
The Gulf of Mexico is home to 10% of U.S. natural gas production.
Capping gains, however, were weather forecasts calling for a return of milder temperatures across parts of the Midwest and Northeast of the U.S. next week, home to many natural gas consumers, though above normal temperatures forecast for the West Coast offset the trend.
Demand for natural gas tends to fall as temperatures moderate, as homes and businesses throttle back their air conditioners.
Reports of a decline in nuclear power outages dampened gains as well.
Natural gas accounts for about a quarter of U.S. electricity generation.