by Investing.com Staff, Investing.com
U.S. stocks were mixed on Friday, as the Dow Jones Industrial Average cooled off from a recent hot streak and a surge in Google Inc (NASDAQ:GOOGL). (NASDAQ:GOOG) shares pushed the NASDAQ Composite index to all-time intraday and closing records.
While the Dow fell mildly in Friday’s session, it still closed higher for the third consecutive week and ended a week above 18,000 for the first time in more than a month. On Friday, the Dow lost 33.80 or 0.19% to 18,086.45, as shares in Intel Corporation (NASDAQ:INTC), Chevron Corporation (NYSE:CVX) and Boeing Company (NYSE:BA) weighed.
The NASDAQ, meanwhile, closed at near-session highs after setting a slew of records on the session. The NASDAQ soared 46.96 or 0.91% to close at 5,210.14, eclipsing the previous all-time closing record of 5,160.09 from June 23. Following Friday’s surge, the NASDAQ is now up by more than 10% year to date.
The S&P 500 Composite index managed to inch higher, even as eight of 10 sectors closed in the red. The S&P received a boost from Technology stocks, which jumped by more than 1.75%. Stocks in the Energy, Basic Materials and Utilities sectors lagged, each falling by more than 1%. The S&P 500 gained 2.35 or 0.11% to end the week at 2,126.64.
Shares in Google skyrocketed nearly 100 points or 16.24% to 699.52, one day after the multinational internet search engine company reported strong advertising revenue growth in its second quarter earnings. At one point, Google reached an all-time record high at $703 a share.
The top performer on the Dow was International Business Machines (NYSE:IBM), which gained 0.88 or 1.51% to 172.51. The worst performer was Intel, which fell 0.43 or 1.44% to 29.47 as investors locked into profits from earlier in the week. On Wednesday, Intel shares gained more than 8% after the technology giant beat analysts’ forecasts with its second quarter earnings.
Google finished as the biggest gainer on the NASDAQ, just ahead of FB which rose more than 4.5% to 94.97. Facebook (NASDAQ:FB) is scheduled to release its quarterly earnings next week. The worst performer was Discovery Communications C Inc (NASDAQ:DISCK), which fell more than 5% to 31.00, one day after receiving a consensus hold rating from a group of 28 brokerage firms.
On the S&P 500, CF Industries jumped 9.85% to 68.92 finishing as the session’s top perform besides Google. The worst performer was Transocean, which dove 7.73% to 13.49 as crude prices continued to plummet. On Friday, WTI crude futures fell to their lowest level in more than four months.
On the New York Stock Exchange, declining issues outnumbered advancing issues by a 2,036 to 1,102 margin.
Additional stock news from Reuters at Investing.com.
The dollar remained at one-and-a-half month highs against a basket of other major currencies on Friday, as the release of upbeat U.S. economic reports continued to lend broad support to the greenback.
Data on Friday showed that the U.S. consumer price index rose 0.3% in June, in line with expectations and after a 0.4% gain the previous month. On a yearly basis, consumer prices rose 0.1% in June, in line with market expectations.
Core consumer prices, which exclude food and energy, rose 0.2% last month, in line with expectations and after an uptick of 0.1% in May.
A separate report showed that U.S. housing starts rose 9.8% to 1.174 million units in June from a revised total of 1.069 million units the previous month. Analysts had expected housing starts to increase by 6.2% last month.
U.S. building permits rose 7.4% to 1.343 million units last month from 1.250 million units in May, confounding expectations for a 11.8% drop.
Also Friday, the University of Michigan said, in a preliminary report, that its consumer sentiment index ticked down to 93.3 in July from 96.1 the previous month, confounding expectations for an unchanged reading.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.20% at 97.97, the highest level since June 2.
EUR/USD slipped 0.28% to 1.0848 after hitting highs of 1.0907 earlier in the session.
The euro had found some support after euro zone ministers agreed on Thursday to give Greece a €7 billion bridging loan from a European Union-wide fund to keep its finances afloat until a bailout is approved.
The loan was expected to be confirmed on Friday by all EU member states.
The news came after the European Central Bank increased its emergency lending to Greek banks by €900 million and added that it is operating under the assumption that Greece will remain in the euro zone.
The pound was moderately higher, with GBP/USD up 0.08% at 1.5624.
Elsewhere, the dollar was lower against the yen, with USD/JPY down 0.09% to 124.02, still close to Thursday’s three-week highs of 124.13, and higher against the Swiss franc, with USD/CHF gaining 0.28% to 0.9606.
USD/CAD edged up 0.25% to trade at six-year highs of 1.2991 after data showed that Canada’s consumer prices rose 0.2% in June, in line with expectations and after an increase of 0.6% the previous month.
On a yearly basis, consumer prices increased by 1.0% last month, in line with market expectations.
Core consumer prices, which exclude the eight most volatile items, were flat in June, compared to expectations for a 0.1% slip and after a 0.4% gain in May.
Speculators this week were more bearish on EUR, CAD and AUD .
Gold futures plummeted more than 1% on Friday to a five-year low, as optimistic U.S. inflation data bolstered hawkish arguments for an interest rate hike by the Federal Reserve later this year.
On the Comex division of the New York Mercantile Exchange, gold for August delivery plunged more than $14 an ounce to an intraday low of $1,129.80 before inching back up to 1,132.80 at the close to finish down 0.98% on the session. The precious metal fell to multi-year lows, dropping under November’s nine-month low of 1,132.90. A major technical breakdown typically occurs when gold dips below $1,130, according to commodities analysts.
Gold futures closed lower for the fifth straight day and for the seventh time in the last eight sessions. Since peaking above $1,300 an ounce in late-January, the precious metal has fallen approximately 12%.
On Friday morning, the U.S. Department of Labor’s Bureau of Labor Statistics said its Consumer Price Index (CPI) rose by 0.3% in June on a monthly basis, in line with consensus estimates. On a year-over-year basis, the CPI gained 0.1% above analysts’ forecasts for a flat reading.
A reading of Core CPI, which strips out food and energy prices, provided even more optimism for the hawks at the Fed in favor of an imminent rate hike. The core reading, which the Fed believes provides a more accurate gauge of inflation, rose 0.2% from May and 1.8% over the last 12 months. Analysts expected gains of 0.1% and 1.7% respectively.
More critically, energy prices rose by 1.7% on the month on the back of a 3.4% increase in gasoline prices. Over the last few weeks, the Fed has strongly hinted that it could raise rates if it received indications that temporary drags from lower energy prices subsided. It has been nearly a decade since the U.S. Central Bank has hiked its benchmark Federal Funds Rate.
Gold, which is not attached to dividends or interest rates, struggles to compete with high-yield bearing assets in periods of rising interest rates.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged to a six-week high of 98.04 before falling slightly back to 97.98.
Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
Silver for September delivery fell 0.112 or 0.75% to 14.868 an ounce.
Copper for September delivery dipped 0.027 or 1.08% to 2.496 a pound.
WTI crude futures fell slightly on Friday plummeting to a four-month low, amid continuing fears of a glut of oversupply on the global energy markets.
On the New York Mercantile Exchange, WTI for August delivery traded in a tight range between $50.16 and $51.23 a barrel, before settling at $50.88, down 0.03 or 0.07%. Texas Long Sweet futures closed lower for the third straight trading day and the 11th time in 14 sessions. At one point, WTI crude futures fell to its lowest level since April 6 when it dipped below $50 a barrel.
On the Intercontinental Exchange (ICE), brent crude for September delivery wavered between $56.41 and $57.34, before closing at $57.09 a barrel, up 0.17 or 0.30%. The spread between the international and U.S. benchmarks of crude stood at $6.21, above Thursday’s level of $6.04.
Oil services firm Baker Hughes (NYSE:BHI) said in its weekly rig count on Friday that U.S. oil rigs last week declined by seven to 638. A week earlier, the rig count edged up by five to 645, marking the second consecutive week of weekly builds. At the end of June, the U.S. oil rig count fell mildly to halt a 29-week streak of weekly draws. Over the last 52-weeks, the count is still down by more than 900 rigs after peaking above 1,550.
The rig count has carried less weight among industry observers in recent months, as U.S. shale producers find ways to drill more effectively while taking less efficient rigs offline.
On Wednesday, the U.S. Energy Information Administration (EIA) said in its weekly Petroleum Status Report that crude inventories fell by 4.3 million barrels for the week ending on July 10. Analysts had expected a draw of 1.2 million barrels for the week.U.S. crude stockpiles are still at 461.4 million barrels, one of the highest levels at this time of year in at least 80 years. The level is nearly 100 million barrels higher than last year at this time.
Last November, Opec triggered a protracted battle for global market share by keeping its production ceiling above 30 million barrels per day. While the world’s largest oil cartel reportedly employed the strategy in an effort to undercut U.S. shale producers, U.S. crude output has remained near record-highs over the last several months. Though production fell slightly last week to 9.562 million barrels per day it is still more than 1.1 million bpd higher than the average level from July, 2014.
As the two oil powers struggle for market share, prices remain depressed due to oversupply and anticipation of higher export levels following Tuesday’s landmark Iranian Nuclear pact. WTI crude futures, for instance, are down roughly 50% over the last 52 weeks.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged to a six-week high of 98.04 before falling slightly back to 97.95.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.
Natural Gas (Thursday Report)
Natural gas futures extended losses on Thursday, after data showed that U.S. natural gas supplies rose more than expected last week.
Natural gas for delivery in August tumbled 3.5 cents, or 1.18%, to trade at $2.883 per million British thermal units on the New York Mercantile Exchange during U.S. morning hours. Prices were at around $2.901 prior to the release of the supply data.
Futures were likely to find support at $2.832, the low from July 15, and resistance at $2.934, the high from July 14.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended July 10 rose by 99 billion cubic feet, compared to expectations for an increase of 95 billion and following a build of 91 billion cubic feet in the preceding week.
Supplies rose by 105 billion cubic feet in the same week last year, while the five-year average change is an increase of 71 billion cubic feet.
Total U.S. natural gas storage stood at 2.767 trillion cubic feet as of last week. Stocks were 653 billion cubic feet higher than last year at this time and 73 billion cubic feet above the five-year average of 2.694 trillion cubic feet for this time of year.
A day earlier, natural gas futures surged 7.8 cents, or 2.75%, to close at $2.918 as forecasts for warmer-than-average temperatures across much of the U.S. boosted summer cooling demand for the fuel.
Updated weather forecasting models pointed to warmer-than-normal temperatures across many regions through July 24, boosting summer cooling demand for the fuel. Forecasts originally called for mild summer weather during the period.
Hotter-than-normal summer temperatures increase the need for gas-fired electricity to cool homes, boosting demand for natural gas. Natural gas accounts for about a quarter of U.S. electricity generation.