Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 3.29%
U.S. stocks were higher after the close on Friday, as gains in the Technology, Basic Materials and Industrials sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average rose 3.29%, while the S&P 500 index gained 3.43%, and the NASDAQ Composite index added 4.26%.
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The best performers of the session on the Dow Jones Industrial Average were Intel Corporation (NASDAQ:INTC), which rose 6.14% or 2.73 points to trade at 47.22 at the close. Meanwhile, Caterpillar Inc (NYSE:CAT) added 5.46% or 6.64 points to end at 128.15 and Boeing Co (NYSE:BA) was up 5.20% or 16.18 points to 327.08 in late trade.
The worst performers of the session were Verizon Communications Inc (NYSE:VZ), which rose 0.25% or 0.14 points to trade at 56.36 at the close. Walmart Inc (NYSE:WMT) added 0.62% or 0.58 points to end at 93.44 and UnitedHealth Group Incorporated (NYSE:UNH) was up 1.17% or 2.77 points to 239.62.
The top performers on the S&P 500 were Mattel Inc (NASDAQ:MAT) which rose 12.30% to 10.41, Advanced Micro Devices Inc (NASDAQ:AMD) which was up 11.44% to settle at 19.00 and Netflix Inc (NASDAQ:NFLX) which gained 9.72% to close at 297.57.
The worst performers were Advance Auto Parts Inc (NYSE:AAP) which was down 2.48% to 158.81 in late trade, KKR & Co LP (F:KR51) which lost 2.09% to settle at 16.43 and Gap Inc (NYSE:GPS) which was down 1.51% to 25.40 at the close.
The top performers on the NASDAQ Composite were Phunware Inc (NASDAQ:PHUN) which rose 102.09% to 54.06, Cancer Genetics Inc (NASDAQ:CGIX) which was up 65.17% to settle at 0.440 and National AmericanUniversity (NASDAQ:NAUH) which gained 42.06% to close at 0.270.
The worst performers were Draper Oakwood Technology Acquisition Inc Class A (NASDAQ:RBZ) which was down 31.22% to 1.30 in late trade, Endologix Inc (NASDAQ:ELGX) which lost 15.54% to settle at 0.60 and Boxlight Corp Class A (NASDAQ:BOXL) which was down 14.71% to 1.63 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2768 to 316 and 63 ended unchanged; on the Nasdaq Stock Exchange, 2335 rose and 334 declined, while 44 ended unchanged.
Shares in Phunware Inc (NASDAQ:PHUN) rose to all time highs; rising 102.09% or 27.31 to 54.06. Shares in Draper Oakwood Technology Acquisition Inc Class A (NASDAQ:RBZ) fell to all time lows; losing 31.22% or 0.59 to 1.30. Shares in Endologix Inc (NASDAQ:ELGX) fell to all time lows; losing 15.54% or 0.11 to 0.60.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 15.99% to 21.38.
Gold Futures for February delivery was down 0.64% or 8.30 to $1286.50 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in February rose 2.42% or 1.14 to hit $48.23 a barrel, while the March Brent oil contract rose 2.43% or 1.36 to trade at $57.31 a barrel.
EUR/USD was up 0.06% to 1.1399, while USD/JPY rose 0.77% to 108.47.
The US Dollar Index Futures was down 0.13% at 95.755.
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Mexico stocks higher at close of trade; S&P/BMV IPC up 0.92%
Canada stocks higher at close of trade; S&P/TSX Composite up 1.50%
Fund managers hoping for stock rally look to emerging markets (Reuters)
The U.S. dollar struggled for direction on Friday as Federal Reserve Chairman Jerome Powell said he would change the balance sheet if needed.
Powell, who was speaking at a Brookings Institution event along with Janet Yellen and Ben Bernanke, said that the Fed would act “quickly” if market concerns outweigh the strong economic data. Powell said:
“We will be prepared to adjust policy quickly and flexibly should that be needed.”
Powell also noted that despite trade tensions weighing on Chinese consumers, he expects China and other emerging markets to “remain consistent” with the rest of the growth in the world.
Upbeat jobs data released earlier in the session increased the chance that the Federal Reserve will raise rates next year.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, slipped 0.11% to 95.77. The dollar was higher against the yen, with USD/JPY rising 0.6% to 108.31.
Meanwhile, the EUR/USD was unchanged at 1.1401 due to the higher dollar and disappointing eurozone data. Eurozone consumer prices rose at a slower-than-expected pace in December, increasing expectations that the European Central Bank will keep interest rates unchanged.
Sterling was higher as the the services sector accelerated in December. Still, the economy is losing momentum ahead of the UK’s departure from the European Union. GBP/USD increased 0.44% to 1.2686.
USD/CAD fell 0.7% to 1.3387 while NZD/USD rose 0.5% to 0.6724 and AUD/USD jumped 1.26% to 0.7091.
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Gold hit its much-awaited $1,300 target Friday, triggering an equally anticipated profit-taking raid that allows the market a breather after a three-week buildup.
COMEX gold futures settled down $9, or 0.7%, at $1,285.80 after scaling a 7-month high of $1,300.35.
It was the first lower settlement for gold since the start of the new year. Still, the yellow metal ended the week in positive territory, helped by gains in the past three sessions.
Friday’s slide in gold came as equities markets took off again on a stellar U.S. jobs report for December.
Stocks and gold typically move in opposite directions. U.S. nonfarm payrolls grew by 312,000 in December, almost double economists’ expectations, sending Wall Street buyers into a frenzy.
Even so, gold bugs might have as much optimism going forward as stock market traders.
For one thing, Fed Chairman Jerome Powell has signaled that he might be more “patient” with rate hikes in 2019, just as President Donald Trump has been hoping the central bank would.
Although the dollar did not crumble after Powell’s remarks on Friday, fewer rate hikes could mean a higher potential for inflation, something that usually boosts gold as a store of value,
Thomas Barkin, the Richmond Fed president, meanwhile, said he expected the U.S. economy to grow more slowly in 2019 compared to 2018, citing risks such as trade policy and financial market volatility. That, in theory, supports gold’s standing as a hedge against the economy.
Walter Pehowich, executive vice-president at Dillon Gage Metals in Addison, Texas, said:
“The financial advisors we speak with continue to advise their clients to diversify part of their portfolios and invest in the gold market on a dollar cost averaging basis. Clients who took their advice a few months ago have benefited from a gold market that’s up over one hundred dollars in just a few months.”
In other precious metals on COMEX, silver futures fell 0.3% to $15.75 per troy ounce by 2:36 PM ET (19:36 GMT).
Palladium jumped 2.8% to $1,234.40. Sister metal platinum surged by 3.3% to $825.90.
In base metals, COMEX copper rallied by 3.2% to $2.65 per pound.
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Are the stars really aligning for oil bulls?
Oil prices rose for a sixth-straight day on Friday, rallying as much as 4% in early trading before settling off the highs. The market gained 3.7% in its first week of 2019 and a whopping 12% from the 18-month lows of $42.36 for U.S. crude on Christmas Eve.
In the latest session, U.S. West Texas Intermediate crude settled up 87 cents, or 1.2%, at $47.09 per barrel, after reaching a three-week high of $49.22 in intraday trade.
Brent, the global crude benchmark, was up by $1.23, or 2.2%, at $57.18 per barrel by 2:55 PM ET (19:55 GMT), after rallying to $58.30 earlier.
The run-up came as stocks on Wall Street surged on Fed Chairman Jerome Powell’s indication that he will be patient with future rate hikes, just as President Donald Trump has been hoping the central bank would. Powell made his remarks after a sterling U.S. jobs report for December.
Also pushing the market higher was China’s affirmation that it will come to the table again next Monday for high-level talks with U.S. officials to try and resolve their trade war.
But offsetting the bullish charge was the announcement by the U.S. Energy Information Administration that domestic crude stockpiles were virtually unchanged last week — up by a miniscule 7,000 barrels — against expectations for a drop of 3 million barrels.
But more eye-popping was the near-7-million-barrels build in gasoline inventories, which the EIA said were now 5% above the five-year average. Distillate fuel stockpiles, which account for diesel to heating oil and jet fuel, increased by an even more staggering 9.5 million barrels last week, although they remain about 7% below the five-year average.
Those builds came on the back of 97% capacity run by refineries, which seemed fully back to work with the start of the New Year. John Kilduff, founding partner at New York energy hedge fund Again Capital, said:
“It’s a very bearish report for oil considering the huge builds in the products. I understand with the drop in post-holidays travel and trucking activity, some slowing demand is expected for products, but not to this extent. This is evidence of a slowing economy everyone’s talking about, in the U.S. at least, if not the world.”
That once again raises question of what oil traders and investors should follow. The stock market or fundamentals of crude, which the weekly EIA data notwithstanding, is certainly looking more aggressive from OPEC’s determination to recoup all of last year’s 25% price drop with production cuts. Kilduff said:
“It’s clear that the Saudis are in the process of moving high heaven and earth to stem production. But we can’t be running on Wall Street juice alone. If we don’t get corresponding numbers for oil demand, you just can’t keep kicking this market higher.”
Tariq Zahir, managing member at the oil-focused Tyche Capital Advisors in New York, agreed:
“We are in a very low demand period. All eyes will now turn to the cuts and if Saudi Arabia will do as promised. If we do not see cuts from Iraq and Russia, the Saudis will have to shoulder the majority of the cuts and if they don’t, a new glut could start developing. At this point we feel prices will go lower in the days and weeks to come from here until we see evidence of the cuts.”
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Natural Gas (24/7 Wall Street)
The U.S. Energy Information Administration (EIA) reported Friday morning that U.S. natural gas stockpiles decreased by 20 billion cubic feet for the week ending December 28.
Analysts were expecting a storage withdrawal in a range of 31 billion to 75 billion cubic feet. The five-year average for the week is a withdrawal of 121 billion cubic feet, and last year’s withdrawal totaled 122 billion cubic feet. Natural gas inventories fell by 48 billion cubic feet in the week ending December 21.
Natural gas futures for February delivery traded up about eight cents in advance of the EIA’s report, at around $2.98 per million BTUs, and slipped to around $2.95 after the report was released.
For the period between January 3 and January 10, NatGasWeather.com expects “low to very low” demand and offers the following outlook:
A weather system will track across the Southeast the next few days with areas of rain. The rest of the country will warm into the weekend with highs of 40s and 50s gaining ground across the northern US and 60s and 70s across the southern US. Weather systems will track into the West Coast the next several days with rain, snow, and cooler conditions. The East will become warmer than normal apart from a quick cold shot across New England late Sunday. Next week will be mild over most of the country with light demand until late in the week.
Total U.S. stockpiles increased week over week from about 20% to 14.3% below last year’s level and also rose from about 21% to 17.2% below the five-year average.
The EIA reported that U.S. working stocks of natural gas totaled about 2.705 trillion cubic feet at the end of last week, around 560 billion cubic feet below the five-year average of 3.265 trillion cubic feet and 450 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.155 trillion cubic feet for the same period a year ago.
Here’s how share prices of the largest U.S. natural gas producers reacted to this latest report:
- Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded up about 2.5%, at $70.34 in a 52-week range of $64.65 to $89.30.
- Chesapeake Energy Corp. (NYSE: CHK) traded up about 9.2%, at $2.33 in a 52-week range of $1.71 to $5.60.
- EOG Resources Inc. (NYSE: EOG) traded up about 3.3% to $92.93. The 52-week range is $82.04 to $133.53.
Furthermore, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 1.3% to $24.53, in a 52-week range of $21.56 to $39.87.
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