Investing.com Weekly Wrap-Up 16 May 2014

U.S. stocks gain on data, tech demand; Dow rises 0.27%

by Investing.com Staff, Investing.com

U.S. stocks finished Friday’s session in positive territory buoyed by upbeat housing data and demand for tech shares among bottom fishers.

At the close of U.S. trading, the Dow 30 rose 0.27%, the S&P 500 index rose 0.37%, while the NASDAQ Composite index rose 0.52%.

The Census Bureau reported earlier that U.S. building permits rose 8% to 1.080 million units last month, up from an upwardly revised 1.000 million in March. Analysts were expecting building permits to rise to 1.010 million units in April, and the better-than-expected figure gave the greenback support.

The report also showed that housing starts rose to 1.072 million units in April, from 947,000 in March, whose figure was revised up from a previously estimated 946,000. Analysts had expected building starts to rise to 980,000 units last month.

Soft consumer sentiment data watered down gains earlier, though late-session buying brought all major indices into positive territory at the closing bell.

The preliminary Thomson Reuters/University of Michigan consumer sentiment index fell to 81.8 in May from 84.1 in April, confounding market expectations for a 84.5 reading.

Elsewhere, bargain hunters snapped up technology and small-cap equities, the beneficiaries of exceptionally loose monetary policies since the 2008 downtown.

The Federal Reserve is expected to wind up its monthly bond-buying program later this year.

Fed asset purchases boost stock prices by suppressing long-term interest rates, and expectations for the Fed to wind down the program this year have bruised tech, biotech and small-cap stocks in recent sessions.

Leading Dow Jones Industrial Average performers included Verizon Communications Inc (NYSE:VZ), up 2.32%, Home Depot Inc (NYSE:HD), up 1.48%, and Nike Inc (NYSE:NKE), which was down 1.38%.

The Dow Jones Industrial Average’s worst performers included United Technologies Corporation (NYSE:UTX), down 0.96%, Intel Corporation (NASDAQ:INTC), down 0.71%, and Chevron Corporation (NYSE:CVX), down 0.49%.

European indices, meanwhile, largely higher.

After the close of European trade, the DJ Euro Stoxx 50 rose 0.18%, France’s CAC 40 rose 0.26%, while Germany’s DAX fell 0.28%. Meanwhile, in the U.K. the FTSE 100 rose 0.22%.

Forex

The dollar traded largely higher against most major currencies on Friday after data revealed a growing U.S. housing sector, though soft consumer sentiment numbers capped the greenback’s advance.

In U.S. trading on Friday, EUR/USD was down 0.10% at 1.3698.

Meanwhile, the single currency continued to come under pressure after data released on Thursday revealed that the euro zone’s gross domestic product grew just 0.2% in the first quarter, missing expectations for a 0.4% growth rate. On a year-over-year basis the bloc’s economy expanded 0.9%, falling short of expectations for growth of 1.1%.

A separate report showed that the bloc’s annual rate of inflation was unchanged at 0.7% in April, in line with forecasts, but still well below the ECB’s target of close to but just under 2%.

Elsewhere, investors continued to track developments in Ukraine, as U.S. Secretary of State John Kerry warned Russia it faced broader economic and sector-related sanctions if it meddled in Ukraine’s presidential elections on May 25.

The dollar was down against the yen, with USD/JPY down 0.07% at 101.50 and up against the Swiss franc, with USD/CHF up 0.10% at 0.8918.

Gold

Better-than-expected data out of the U.S. housing sector sent gold prices falling on Friday as investors bet the Federal Reserve will continue to taper stimulus programs that have supported the yellow metal for years.

On the Comex division of the New York Mercantile Exchange,gold futures for June delivery traded at 1,292.30 a troy ounce during U.S. trading, down 0.10%, up from a session low of $1,287.90 and off a high of $1,298.40.

The June contract settled down 0.94% at $1,293.60 on Thursday.

Futures were likely to find support at $1,278.30 a troy ounce, Monday’s low, and resistance at $1,309.10, Wednesday’s high.

Strong U.S. housing data gave support to the U.S. dollar and weighed on the price of gold.

The news kept expectations firm that the Federal Reserve will continue to wind down its monthly bond-buying program, which suppresses interest rates to spur recovery, bolstering gold’s appeal as a hedge to the weaker dollar.

Meanwhile, silver for July delivery was down 0.83% at $19.322 a troy ounce, while copper futures for July delivery were up 0.01% at $3.145 a pound.

Oil

Crude futures rose on Friday after U.S. housing data beat expectations, while concerns a deal to reopen Libyan oilfields will collapse also bolstered prices.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in June traded at $102.07 a barrel during U.S. trading, up 0.56%. New York-traded oil futures hit a session low of $101.40 a barrel and a high of $102.23 a barrel.

The June contract settled up 0.85% at $101.50 a barrel on Thursday.

Nymex oil futures were likely to find support at $101.28 a barrel, Thursday’s low, and resistance at $102.64 a barrel, Wednesday’s high.

Separately, concerns that a deal between the Libyan government and armed protestors to open oilfields appeared to crumble this week, which pressured crude prices higher.

Armed protestors have closed access to key Libyan oilfields, bringing the country’s production to 200,000 barrels of oil a day from 1.4 million produced last year.

Elsewhere, investors continued to track developments in Ukraine, as U.S. Secretary of State John Kerry warned Russia it faced broader economic and sector-related sanctions if it meddled in Ukraine’s presidential elections on May 25.

Russia is the world’s second-largest oil exporter after Saudi Arabia, and concerns have persisted that the conflict will escalate and disrupt Russian crude shipments.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for July delivery were up 0.55% and trading at US$109.69 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$7.62 a barrel.

Natural Gas

Natural gas prices fell on Friday after updated weather-forecasting models called for mild temperatures across much of the U.S., which should curb demand for both heating and air conditioning.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at $4.443 per million British thermal units during U.S. trading, down 0.59%. The commodity hit session high of $4.458 and a low of $4.418.

The June contract settled up 2.34% on Thursday to end at $4.469 per million British thermal units.

Natural gas futures were likely to find support at $4.222 per million British thermal units, the low from April 2, and resistance at $4.508 Thursday’s high.

Mild springtime temperatures should hover over most of the heavily populated East Coast next week, which should prompt households to throttle back on heating and air conditioning.

The high for New York City will reach 73 Fahrenheit on Sunday and 68 on Monday.

Elsewhere, investors continued to digest Thursday’s supply report.

The Energy Information Administration said that U.S. Natural Gas Storage rose by 105 billion cubic feet in the week ending May 9, up from 74 billion cubic feet in the preceding month.

Analysts had expected U.S. Natural Gas Storage to rise 99 billion cubic feet last week.

Prices rose initially on the news, as analysts viewed the build as small.

U.S. stockpiles need to fill by November at the start of the heating season, which means quantities going into to storage must rise, as the possibilities of a winter storage still remain.

Stockpiles are 40% below their level this time last year and 45% below the five-year average.

Producers would need to add 2.6 trillion to 2.9 trillion cubic feet to storage by November 1 to meet typical winter demand.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June were up 0.64% at $102.15 a barrel, while heating oil for June delivery were up 0.30% at $2.9594 per gallon.