Investing.com Weekly Wrap-Up 27 February 2015

U.S. stocks post highest monthly gains in more than two years

by Investing.com Staff, Investing.com

Although stocks fell slightly across the board on Friday, U.S. markets ended February at near record-highs after posting the highest monthly gains in more than two years.

The Dow Jones Industrial Average closed Friday at 18,132.70, down 81.72 points or 0.45%. Still, the Dow was up more than 5.5% for the month after ending January at 17,164.95. The increase represented the largest monthly gain on the Dow since January, 2013.

The biggest performers on the Dow on Friday was Coca-Cola Company (NYSE:KO), which gained 0.84 points or 1.98% to 43.30. The worst performer was American Express, which fell 1.66 or 1.99% to 43.30.

The S&P 500 Composite index, meanwhile, had its biggest monthly gain in more than 36 months, ending February up 5.5% at 2,104.50. On Friday, the S&P 500 fell 6.24 points or 0.30%, following losses in the financial and healthcare sectors.

Following higher than expected earnings for the fourth quarter, Monster Beverage(NASDAQ:MNST.O) Corporation (NASDAQ:MNST) posted the biggest gains of the day on the S&P 500. Investors of Monster earned 72 cents per diluted share, above estimates of 59 cents. Monster Beverage Corporation gained 13.13% or 16.38 points to close at 141.12.

The worst performer of the day was Southwestern Energy Company (NYSE:SWN), which lost 1.21 or 4.5% to fall to 25.14, after announcing plans to cut investment spending. JC Penney Company Inc Holding (NYSE:JCP) also fell 6.80% or 0.62 points to 8.50 after posting surprisingly low fourth quarter sales. Weight Watchers International Inc (NYSE:WTW) was also among the biggest losers of the day, dropping 35.38% or 6.23 to 11.33.

The NASDAQ Composite index finished with its best month since January, 2012, but still finished short of the 5,000 barrier. The NASDAQ fell 0.49% or 24.36 points to 4,963.53. It has been more than 14 years since the NASDAQ has been above the 5,000 level.

The worst performer of the day was Catamaran Corporation (NASDAQ:CTRX), which lost 1.21 or 4.59% to fall to 25.14. Monster Beverage was also the biggest gainer on the NASDAQ.

Forex

The euro weakened slightly against the U.S. dollar on Friday amid the release of mixed U.S. economic data and the approval of an extension of the Greece bailout in Germany.

EUR/USD reversed previous gains late in U.S. trading after Federal Reserve vice chair Stanley Fischer announced that the Federal Open Market Committee (FOMC) anticipates that it will raise its benchmark Federal Funds Rate at some point this year.

The euro fell 0.0003 or 0.03% to close at 1.1196. At one point during trading, the euro dropped to its lowest level against the U.S. dollar since the fall of 2003.

EUR/USD reached a daily high of 1.1246 following the release of several U.S. economic indicators. U.S. gross domestic product for the final quarter of 2014 increased at a 2.2% rate, down from an initial estimate of 2.6%, the Commerce Department said. In the third quarter, the U.S. economy grew at rate of 5%.

The Institute for Supply Management-Chicago Business Barometer, also known as Chicago PMI, fell further than expected — dropping to a five and a half year low of 45.8. The reading fell from 59.4 in January, following significant drops in production and order backlogs. In addition, frigid temperatures nationwide caused the University of Michigan’s Consumer Sentiment index to drop for the month of February following an 11-year high the previous month.

At the same time, there was positive news in the housing sector as pending home sales in the United States increased to its highest level in a year and half. The National Association of Realtors Pending Home Sales Index increased 1.7% for January, marking the fifth consecutive month of year-over-year gains.

In spite of the weak euro, the STOXX Europe 600 Index increased 0.39% or 1.52 to 392.21. The index is up more than 13% for the year.

Also on Friday, Germany’s lower house of parliament approved a four-month extension of a bailout to Greece. Members voted to approve the euro zone €240 billion bailout by a vote of 541-32.

CTFC Commitment of Traders

Speculators were much less bullish on the S&P 500 and less bearish on both the euro and British pound this week.

Gold

The price of gold increased for a third consecutive day on Friday amid mixed U.S. economic data and a slightly weaker dollar.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery edged up 0.1% to $1,211.70 a troy ounce. Gold reached a high of $1,219.20 on Friday morning in U.S. trading.

Futures were likely to find support at $1,177.80, the low from January 5, and resistance at $1,215.30, the high from February 20.

For the month of February, however, Gold fell more than 5% following record increases in January. Gold ended the first month of the year up 8%, at once point reaching $1,300 a month. Gold investors in January were rewarded with the highest increase in prices in three years.

Prices, though, have fallen back upon expectations of an impending interest-rate hike. Earlier in the week, dovish testimony Fed Reserve chair Janet Yellen indicated that the central bank could raise interest rates later this year if wages increase and inflation moves closer to its targeted goal of 2%.

Gold can lose its appeal as a safe haven in periods of rising interest rates.

The dollar weakened Friday after the release of mixed U.S. economic data. Gross domestic product for the final quarter of 2014 rose at a 2.2% rate, down from an initial estimate of 2.6%, the Commerce Department said. In the third quarter, the U.S. economy grew at rate of 5%.

The Institute for Supply Management-Chicago Business Barometer, also known as Chicago PMI, fell further than expected — dropping to a five and a half year low of 45.8. The reading fell from 59.4 in January, following significant drops in production and order backlogs. In addition, frigid temperatures nationwide caused the University of Michigan’s Consumer Sentiment index to drop for the month of February following an 11-year high the previous month.

At the same time, there was positive news in the housing sector as pending home sales in the United States increased to its highest level in a year and half. The National Association of Realtors Pending Home Sales Index increased 1.7% for January, marking the fifth consecutive month of year-over-year gains.

The U.S. dollar index, which measures the greenback’s strength against a basket of six other major currencies, fell slightly by 0.06% or 0.06 points to 95.30.

Meanwhile, silver futures for May delivery fell 0.037 or 0.22% to $16.587 a troy ounce.

Elsewhere on Comex, copper for May delivery rose 0.008 or 0.29% to $2.687 a pound.

Oil

Crude Oil finished the month of February above $49 a barrel, marking the first monthly gain since last June when oil prices began a prolonged slide.

On the New York Mercantile Exchange, WTI crude oil for April delivery rose 2.65% or 1.27 points to $49.45 a barrel. The sharp increased continued the trend of volatile price fluctuations, as prices have wavered dramatically over the last several weeks.

Daily oil prices have moved more than 2% in an up or down direction in 25 of the last 38 trading days, according to the Wall Street Journal. The large swings have caused the CBOE Crude Oil Volatility Index to skyrocket in recent weeks.

Oil futures dipped on Thursday to $48.15 a barrel, one day after the Energy Information Administration (EIA) said in its weekly report that U.S. crude oil inventories rose by 8.4 million barrels last week. The EIA expected inventories to increase by 4.0 million barrels in its weekly forecast.

Oil prices moved up slightly throughout the day before the oil services firm Baker Hughes(NYSE:BHI) released its weekly U.S. rig count during midday trading. The count for oil and gas rigs nationwide dropped by 43 from last week’s total of 1,378. The nationwide right total is also down by 502 in comparison with the count from last year at this time. Following the release, the price for WTI crude oil fell below $48.50 a barrel before quickly rebounding.

On the Intercontinental Exchange (ICE) Friday, brent crude for April delivery rose 3.61% or 2.19 points to $62.90 a barrel. At the start of the week, brent crude fell below $60 a barrel following comments from the Nigerian oil minister that Opec could consider calling an emergency meeting if prices continued to plunge.

Elsewhere, natural gas went up 1.26% or 0.034 points to 2.732.

Oil prices have dropped more than 50% since June, the fourth-largest decline for oil ever over a six-month period.