Investing.com Weekly Wrap-Up 25 April 2014

U.S. stocks fall on Ukraine fears; Dow ends down 0.85%

by Investing.com Staff, Investing.com

U.S. stocks slid on Friday after tensions in Ukraine continued to escalate and steer investors away from stocks and into safe-haven positions such as the yen or gold.

At the close of U.S. trading, the Dow 30 fell 0.85%, the S&P 500 index fell 0.81%, while the NASDAQ Composite index fell 1.75%.

Tensions in Ukraine continued to escalate on Friday after Ukrainian troops killed several pro-Russian rebels on Thursday.

Russian troops, meanwhile, conducted military drills close to the border between the two countries, which frayed nerves even more.

In response, U.S. Secretary of State John Kerry said Washington was moving closer to slapping fresh sanctions on Moscow, which steered investors away from stocks and into safe-haven positions, the yen and gold especially.

Russia is the world’s second largest oil exporter after Saudi Arabia, and a halt in oil and gas exports to Europe could bruise the U.S., as many U.S. companies depend on Europe for healthy chunks of revenue.

Data out of the U.S. failed to offset geopolitical tensions in equities markets.

The Thomson Reuters/University of Michigan’s final April consumer sentiment index came in at 84.1, beating market expectations for a 83.0 reading. April’s preliminary reading was 82.6.

On the earnings front, Ford Motor Company (NYSE:F) reported earnings below expectations, while Amazon.com Inc (NASDAQ:AMZN) said it was bracing for a loss in the current quarter.

Starbucks Corporation (NASDAQ:SBUX), meanwhile, released earnings that topped forecasts as did tech giant Microsoft Corporation (NASDAQ:MSFT).

Visa Inc (NYSE:V) shares plunged after the company said U.S. sanctions on Russia were hurting its transaction volumes, adding revenues would suffer this quarter.

Leading Dow Jones Industrial Average performers included McDonald’s Corporation (NYSE:MCD), up 0.89%, Coca-Cola Company (NYSE:KO), up 0.75%, and General Electric Company (NYSE:GE), up 0.59%.

The Dow Jones Industrial Average’s worst performers included Visa Inc (NYSE:V), down 5.03%, Intel Corporation (NASDAQ:INTC), down 1.81%, and Walt Disney Company (NYSE:DIS), down 1.71%.

European indices, meanwhile, finished lower.

After the close of European trade, the DJ Euro Stoxx 50 fell 1.30%, France’s CAC 40 fell 0.80%, while Germany’s DAX fell 1.54%. Meanwhile, in the U.K. the FTSE 100 fell 0.26%.

Forex

The dollar traded lower against most major currencies on Friday as tensions between Russia and the Ukraine continued to build, prompting investors to avoid the greenback and seek safety in gold, yen and other safe-haven positions.

In U.S. trading on Friday, EUR/USD was up 0.03% at 1.3837.

The dollar was down against the yen, with USD/JPY down 0.19% at 102.14 and down against the Swiss franc, with USD/CHF down 0.07% at 0.8810.

The greenback was flat against the pound, with GBP/USD unchanged at 1.6803.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.18% at 1.1043, AUD/USD up 0.03% at 0.9266 and NZD/USD up 0.13% at 0.8576.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.04% at 79.82.

Gold

Gold futures were higher on Friday, supported by renewed tensions between Russia and Ukraine, while markets awaited the release of U.S. consumer sentiment data later in the trading session.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at $1,300.20 a troy ounce during European afternoon trade, up 0.76%.

The June contract settled 0.47% higher on Thursday to end at $1,290.6 a troy ounce.

Gold futures were likely to find support at $1,277.60 a troy ounce, the low from April 22 and resistance at $1,326.90, the high from April 15.

Market participants were eyeing upcoming U.S. data after a report on Thursday showed that U.S. durable goods orders rose more than expected in March, fuelling optimism over the strength of the country’s economic recovery.

Separately, the Labor Department said the number of people who filed for unemployment assistance in the U.S. last week rose by 24,000 to 329,000. Despite the increase the underlying trend indicated continued strength in the labor market.

Meanwhile, gold remained supported by renewed tensions in Eastern Europe, after Ukrainian forces killed up to five pro-Moscow rebels on Thursday. In response, Russia launched army drills near the border, sparking fears its troops would invade.

U.S. Secretary of State John Kerry said Washington was drawing closer to imposing more sanctions on Moscow.

Elsewhere on the Comex, silver for May delivery dipped 0.03% to trade at $19.682 a troy ounce, while copper for May delivery edged down 0.09% to trade at $3.118 a pound.

Oil

Crude futures fell on Friday after investors sold the commodity for profits, keeping a wary eye on escalating tensions in Ukraine on concerns the standoff could affect shipments from energy-rich Russia.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in June traded at $100.75 a barrel during U.S. trading, down 1.17%. New York-traded oil futures hit a session low of $100.51 a barrel and a high of $102.05 a barrel.

The June contract settled up 0.49% at $101.94 a barrel on Thursday.

Nymex oil futures were likely to find support at $100.51 a barrel, the earlier low, and resistance at $102.35 a barrel, Thursday’s high.

The ongoing conflict in Ukraine sent oil prices rising to levels ripe for profit taking, as investors digested bearish inventory data this week and concluded crude had risen too far.

The U.S. Energy Information Administration said earlier this week that crude oil inventories rose by 3.52 million barrels in the week ended April 18, surpassing expectations for a build of 2.27 million barrels.

Total U.S. crude oil inventories stood at 397.7 million barrels as of last week, highs not seen in roughly 80 years.

The EIA said total motor gasoline inventories decreased by 0.27 million barrels, compared to forecasts for a decline of 1.71 million barrels, while distillate stockpiles rose by 0.59 million barrels.

Oil prices have remained elevated on events unfolding in Ukraine, which continued to escalate this week after Ukrainian troops killed several pro-Russian rebels on Thursday.

Russian troops, meanwhile, conducted military drills close to the border between the two countries.

In response, U.S. Secretary of State John Kerry said Washington was moving closer to slapping fresh sanctions on Moscow.

Russia is the world’s second largest oil exporter after Saudi Arabia.

Data out of the U.S. also failed to halt Friday’s round of profit taking.

The Thomson Reuters/University of Michigan’s final April consumer sentiment index came in at 84.1, beating market expectations for a 83.0 reading. April’s preliminary reading was 82.6.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for June delivery were down 0.57%, trading at US$109.71 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$8.96 a barrel.

Natural Gas

A bearish weekly stockpile report revealing a larger-than-expected inventory build in the U.S. sent natural gas prices falling on Friday, as markets priced in a late-season cool snap and avoided the commodity.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at $4.669 per million British thermal units during U.S. trading, down 1.14%. The commodity hit session high of $4.739 and a low of $4.646.

The June contract settled down 0.51% on Thursday to end at $4.723 per million British thermal units.

Natural gas futures were likely to find support at $4.487 per million British thermal units, the low from April 17, and resistance at $4.818, Thursday’s high.

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 18 rose by 49 billion cubic feet, above forecasts for an increase of 42 billion cubic feet.

Total U.S. natural gas storage stood at 899 billion cubic feet. Stocks were 831 billion cubic feet less than last year at this time and 1.008 trillion cubic feet below the five-year average of 1.907 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 470 billion cubic feet below the five-year average, following net injections of 17 billion cubic feet.

Stocks in the Producing Region were 412 billion cubic feet below the five-year average of 805 billion cubic feet after a net injection of 22 billion cubic feet.

The numbers sent natural gas prices falling on Friday, despite chilly weather trekking across the U.S., as investors have now priced the late-season cool snap into trading.