Investing.com Weekly Wrap-Up 28 March 2014

U.S. stocks trim data-driven gains, brace for earnings; Dow up 0.36%

by Investing.com Staff, Investing.com

U.S. stocks applauded solid consumer spending numbers on Friday, though equities trimmed gains when investors sold and jumped to the sidelines to brace for first-quarter earnings to begin publishing in April.

At the close of U.S. trading, the Dow 30 rose 0.36%, the S&P 500 index rose 0.46%, while the Nasdaq rose 0.11%

The Commerce Department reported earlier that U.S. personal spending rose 0.3% in February, in line with expectations, Personal spending in January was revised down to a 0.2% gain from a previously estimated 0.4% increase.

A separate report revealed that the core U.S. personal consumption expenditures price index remained unchanged at 0.1% last month, in line with expectations.

Elsewhere the revised Thomson Reuters/University of Michigan consumer sentiment index ticked up to 80.0 in March from 79.9 the previous month. Analysts had expected the index to rise to 80.5 this month.

Stocks rose, as the largely positive data came a day after economic reports showed that U.S. jobless claims fell to the lowest level since late November last week, while U.S. economic fourth quarter growth was revised higher.

Later in the session, profit taking kicked in and trimmed gains, as investors flocked to the sidelines to await the release of first-quarter earnings in early April.

Monday will mark the last trading day of the quarter.

Leading Dow Jones Industrial Average performers included Microsoft Corporation (NASDAQ:MSFT), up 2.38%, Exxon Mobil Corporation (NYSE:XOM), up 1.53%, and Cisco Systems Inc (NASDAQ:CSCO), up 1.39%.

The Dow Jones Industrial Average’s worst performers included Visa Inc (NYSE:V), down 1.72%, Pfizer Inc (NYSE:PFE), down 0.70%, and Verizon Communications Inc (NYSE:VZ), down 0.56%.

European indices, meanwhile, finished higher.

After the close of European trade, the DJ Euro Stoxx 50 rose 1.17%, France’s CAC 40 rose 0.74%, while Germany’s DAX rose 1.44%. Meanwhile, in the U.K. the FTSE 100 rose 0.41%.

The European Union and the U.S. intensified sanctions against Russian President Vladimir Putin and his allies to pressure his government to defuse the global standoff over Ukraine.

Forex

Solid personal spending data in the U.S. sent the dollar firming against most major currencies on Friday, though profit taking cooled the greenback’s gains.

In U.S. trading on Friday, EUR/USD was up 0.07% at 1.3751.

The Commerce Department reported earlier Friday that U.S. personal spending rose 0.3% in February, in line with expectations, Personal spending in January was revised down to a 0.2% gain from a previously estimated 0.4% increase.

A separate report showed that the core U.S. personal consumption expenditures price index remained unchanged at 0.1% last month, in line with expectations.

Elsewhere the revised Thomson Reuters/University of Michigan consumer sentiment index ticked up to 80.0 in March from 79.9 the previous month. Analysts had expected the index to rise to 80.5 this month.

Still the dollar rose, as the largely positive data came a day after economic reports showed that U.S. jobless claims fell to the lowest level since late November last week, while U.S. economic fourth quarter growth was revised higher.

Market sentiment remained firm that the Federal Reserve will continue winding down stimulus programs this year and begin raising benchmark interest rates from their current rock-bottom levels some time in 2015.

Meanwhile in the euro zone, preliminary data revealed that Germany’s consumer price index rose 0.3% in March, missing expectations for a 0.4% increase, after a 0.5% gain in February.

Data also showed that French consumer spending rose 0.1% in February, less than the expected 0.8% increase, after a 2.1% decline the previous month.

The dollar was up against the yen, with USD/JPY up 0.63% at 102.82, and up against the Swiss franc, with USD/CHF up 0.02% at 0.8868.

The greenback was down against the pound, with GBP/USD up 0.20% at 1.6644.

The pound firmed against the dollar after data showed that U.K. gross domestic product rose by 0.7% in the fourth quarter, in line with expectations.

A separate report showed that the U.K. current account deficit narrowed to £22.4 billion in the fourth quarter, from £22.8 billion in third quarter, whose figure was revised down from a previously estimated deficit of £20.7 billion.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.29% at 1.1064, AUD/USD down 0.09% at 0.9250 and NZD/USD down 0.14% at 0.8660.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.08% at 80.35.

Gold

Gold prices edged lower on Friday after upbeat personal spending data bolstered the dollar by cementing expectations for the Federal Reserve to wind down monthly asset purchases this year and begin hiking benchmark interest rates in 2015, though bottom fishing trimmed losses.

Fed asset purchases, currently set at $55 billion a month, weaken the dollar to spur recovery, thus bolstering gold’s appeal as a hedge as long as the Fed intervenes.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at $1,294.50 a troy ounce during U.S. trading, down 0.02%, up from a session low of $1,286.40 and off a high of $1,299.40.

The June contract settled down 0.66% at $1,294.80 on Thursday.

Futures were likely to find support at $1,265.00 a troy ounce, the low from Feb. 10, and resistance at $1,343.00, the high from March 21.

The dollar rose, as the largely positive data came a day after economic reports showed that U.S. jobless claims fell to their lowest level since late November last week, while U.S. economic fourth quarter growth was revised higher.

Market sentiment remained firm that the Federal Reserve will continue winding down stimulus programs this year and begin raising benchmark interest rates from their current rock-bottom levels some time in 2015.

Meanwhile in the euro zone, preliminary data revealed that Germany’s consumer price index rose 0.3% in March, missing expectations for a 0.4% increase, after a 0.5% gain in February.

The data softened the euro and sent investors to the dollar, a recipe for falling gold prices.

Bottom fishing trimmed gold’s losses, as many investors viewed the commodity as oversold.

Meanwhile, silver for May delivery was up 0.41% at US$19.788 a troy ounce, while copper futures for May delivery were up 1.60% at US$3.041 a pound.

Oil

Crude oil futures rose nearly three-week highs on Friday, as still supported by data on Thursday showing that U.S. jobless claims fell to the lowest level since late November last week, while U.S. economic fourth quarter growth was revised higher.

On the New York Mercantile Exchange, West Texas Intermediate Crude Oil for delivery in May traded at USD101.57 a barrel during European morning trade, up 0.28%.

The May contract settled 1.02% higher on Thursday to end at USD101.28 a barrel.

Futures were likely to find support at $100.03 a barrel, Thursday’s low and resistance at $102.54 a barrel, the high from March 10.

Oil futures strengthened on Thursday after official data showed that U.S. gross domestic product was revised up to 2.6% in the final three months of 2013, from a preliminary estimate of 2.4%. Market expectations had been for an upward revision to 2.7%.

The report showed that personal spending was revised up to 3.3% from 2.6% initially, the fastest rate of growth in three years.

Separately, the Labor Department said the number of people who filed for initial jobless benefits in the U.S. last week declined by 10,000 to a seasonally adjusted 311,000 from the previous week’s revised total of 321,000. Analysts had expected jobless claims to rise by 4,000.

The upbeat data added to hopes that the slowdown in economic activity seen at the start of the year would be temporary.

Oil prices also remained supported after the U.S. and the European Union agreed on Wednesday to work together to prepare tougher sanctions against Russia and to make Europe less dependent on Russian gas.

President Barack Obama said that Russia’s actions had to be condemned and he warned that “the isolation will deepen, sanctions will increase” for Russia

Russia is the world’s biggest energy producer.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery eased 0.07% to trade at USD107.78 a barrel, with the spread between the Brent and crude contracts standing at USD6.21 a barrel.

Natural Gas

Natural gas futures fell on Friday after investors locked in gains from Thursday’s bullish U.S. supply report and sold the commodity for profits.

On the New York Mercantile Exchange, natural gas futures for delivery in May traded at $4.505 per million British thermal units during U.S. trading, down 0.74%. The commodity hit session high of $4.568 and a low of $4.481.

The May contract settled up 3.25% on Thursday to end at $4.538 per million British thermal units.

Natural gas futures were likely to find support at $4.258 per million British thermal units, Monday’s low, and resistance at $4.585, the high from March 17.

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 March 21 fell by 57 billion cubic feet, surpassing expectations for a decline of 54 billion cubic feet.

The numbers sent prices rising to levels ripe for profit taking.

Supplies fell by 90 billion cubic feet in the same week a year earlier while the five-year average change for the week is a drop of 7 billion cubic feet.

Total U.S. natural gas storage stood at 896 billion cubic feet, the lowest for this time of year since 2003.

Stocks were 899 billion cubic feet less than last year at this time and 926 billion cubic feet below the five-year average of 1.822 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 419 billion cubic feet below the five-year average, following net withdrawals of 39 billion cubic feet.

Stocks in the Producing Region were 378 billion cubic feet below the five-year average of 754 billion cubic feet after a net withdrawal of 15 billion cubic feet.

Elsewhere, mild springtime temperatures should settle in over much of the U.S. in the coming days and suppress need for heating, though forecasts for pockets of below-normal mercury readings lingering in the northeastern U.S. cushioned losses.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.