Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 1.38%
U.S. stocks were higher after the close on Friday, as gains in the Oil & Gas, Industrials and Basic Materials sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average rose 1.38% to hit a new 1-month high, while the S&P 500 index gained 1.32%, and the NASDAQ Composite index added 1.03%.
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The best performers of the session on the Dow Jones Industrial Average were Home Depot Inc (NYSE:HD), which rose 2.69% or 4.71 points to trade at 179.58 at the close. Meanwhile, UnitedHealth Group Incorporated (NYSE:UNH) added 2.21% or 5.73 points to end at 265.50 and Caterpillar Inc (NYSE:CAT) was up 2.18% or 2.92 points to 136.60 in late trade.
The worst performers of the session were Walt Disney Company (NYSE:DIS), which rose 0.03% or 0.03 points to trade at 111.04 at the close. Pfizer Inc (NYSE:PFE) added 0.14% or 0.06 points to end at 42.53 and Merck & Company Inc (NYSE:MRK) was up 0.36% or 0.27 points to 75.87.
The top performers on the S&P 500 were Pacific Gas & Electric Co (NYSE:PCG) which rose 13.68% to 7.23, VF Corporation (NYSE:VFC) which was up 12.39% to settle at 82.34 and Schlumberger NV (NYSE:SLB) which gained 8.12% to close at 44.73.
The worst performers were CarMax Inc (NYSE:KMX) which was down 4.09% to 61.92 in late trade, Netflix Inc (NASDAQ:NFLX) which lost 3.99% to settle at 339.10 andLKQ Corporation (NASDAQ:LKQ) which was down 2.42% to 26.25 at the close.
The top performers on the NASDAQ Composite were Ascent Capital Group Inc (NASDAQ:ASCMA) which rose 42.79% to 0.61, Avalon Globocare Corp (NASDAQ:AVCO) which was up 34.94% to settle at 5.600 and Ultra Petroleum Corp(NASDAQ:UPL) which gained 29.87% to close at 0.995.
The worst performers were Organogenesis Holdings Inc (NASDAQ:ORGO) which was down 44.82% to 30.350 in late trade, Tyme Technologies Inc (NASDAQ:TYME) which lost 35.39% to settle at 2.41 and Bio Path Holdings Inc (NASDAQ:BPTH) which was down 30.56% to 1.750 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2234 to 834 and 76 ended unchanged; on the Nasdaq Stock Exchange, 1806 rose and 841 declined, while 83 ended unchanged.
Shares in Avalon Globocare Corp (NASDAQ:AVCO) rose to all time highs; up 34.94% or 1.450 to 5.600.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 1.44% to 17.80 a new 1-month low.
Gold Futures for February delivery was down 0.92% or 11.95 to $1280.35 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in February rose 3.30% or 1.72 to hit $53.79 a barrel, while the March Brent oil contract rose 2.42% or 1.48 to trade at $62.66 a barrel.
EUR/USD was down 0.25% to 1.1366, while USD/JPY rose 0.43% to 109.70.
The US Dollar Index Futures was up 0.32% at 96.018.
See also:
Mexico stocks higher at close of trade; S&P/BMV IPC up 0.74%
Canada stocks higher at close of trade; S&P/TSX Composite up 0.60%
The 5 Top-Performing S&P 500 Stocks of 2018 (Motley Fool)
The dollar was set to snap a four-week losing streak against its rivals Friday, on the back of a decline in the Japanese yen. The gains come amid growing investor optimism over a U.S-China trade deal after Chinese officials reportedly offered to boost U.S. imports.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.27% to 95.97 in the early afternoon before closing up 0.32% at 96.018.
China offered to boost annual imports of U.S. goods by a combined value of more than $1 trillion in a bid to cut its surplus with the U.S., Bloomberg reported.
The news fueled investor hopes that the stalemate between the U.S. and China may be resolved sooner rather later, prompting a rally in risk assets, which kept the safe-haven yen on its back foot.
USD/JPY rose 0.46% to Y109.74.
The dollar was also lifted by U.S. industrial production data that topped economists’ forecasts. U.S. manufacturing output rose by 0.3% last month, beating economists’ forecasts for a 0.2% rise.
Elsewhere, the pound gave back some of the gains against the greenback seen in the wake of the U.K. parliament’s rejection of the government’s Brexit deal.
USD/GBP fell 0.75% to $1.2887, but remained on track to post its fifth-weekly rise.
EUR/USD fell 0.26% to $1.1367, and the pair could be set for a further slide as analysts sound the alarm on Euro-area weakness. That could force the European central bank to turn more dovish in March.
“We continue to think the ECB will have to give us some sweeteners come March,” Bank of America Merrill Lynch (NYSE:BAC) said.
USD/CAD fell 0.11% to C$1.3263 as a rally in oil prices and stronger-than-expected Canada inflation data supported the loonie, limiting gains in the pair.
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Palladium’s rally has spawned calls for record highs above $1,500, but the auto-catalyst metal may run out of gas first and fall into a range for a while, just like gold.
Used for purifying auto emissions, palladium dropped $17.75, or 1.3%, on its spot price on Friday to trade at $1,382.65 per ounce by 2:00 PM ET (19:00 GMT). On Thursday, it hit all-time highs of $1,440.35, making it the world’s most valuable metal.
In futures trade, the benchmark March palladium contract on the New York Mercantile Exchange’s Comex settled down $13.10, or 1%, at $1,335.10.
Since surpassing gold’s 2019 highs of above $1,300 on Jan. 4, palladium’s spot price renewed its highs at the top five more times, culminating in Thursday’s run above $1,400 for the first time.
Gold has treaded water in a broad $1,285 to $1,295 range after a Jan. 4 peak of $1,300.40 on its spot price.
The spot price of gold, or bullion, was down $9.66, or 0.8%, at 1,282.37 by 2:00 PM ET.
On Comex, February gold futures settled down $9.75, or 0.8%, at $1,282.60.
Palladium’s run-up has been fueled by stimulus measures aimed at boosting car ownership in China. Also helping was a projection by Metals Focus that supplies will remain in deficit this year for an eighth-straight year.
Even so, the auto-catalyst metal’s near-10% gain since the start of the year — and 70% jump since August — may be overdone, some say.
Walter Pehowich, industry analyst and executive vice-president at Dillon Gage Metals in Addison, Texas, said:
“Looking at how high far we have progressed and how fast, the price of palladium is way overdue for a correction, especially if the news stories [on its supply shortage] start to dry up.”
Pehowich said estimates for 2019 palladium short supply range from as low as 250,000 ounces to a high of 1 million ounces “depending on who you talk to“. He added:
“If fresh metal comes into the market place … a sell off could occur. And that’s what I expect to happen.”
In other precious metals on Comex, silver futures slid by 15 cents, or 1%, to $15.39 per ounce.
In base metals,copper rose 3.4 cents, or 1.3%, to $2.71 per pound.
See also:
- Gold Prices Heads for Weekly Gains on Less Hawkish Fed, Shutdown Worries
- Silver Is the Outcast Among Precious-Metals Outcast to Start 2019 (Bloomberg)
Sharp bouts of price gains are likely in oil as Saudi Arabia ratchets up efforts to raise the visibility of OPEC’s output cuts. But patience may also be key for oil producers, with the West’s energy watchdog anticipating any market recovery to be more gradual than immediate.
Futures of New York-traded West Texas Intermediate crude and London’s Brent jumped about 3% or more on Friday as the OPEC+ alliance of 25 oil producers listed cuts by each country in the group to address market concerns that the supply-demand rebalancing of the past six weeks lacked transparency. OPEC+ has committed to cut at least 1.2 million barrels per day through this year and the Saudis have hinted they will do more to get to $80 per barrel.
WTI settled up $1.73, or 3.3%, $53.80 per barrel, hitting a six-week high of $53.90.
Brent, the global oil benchmark, rose by $1.50, or 2.5%, to $62.68 by 2:30 PM ET (19:30 GMT). It also hit a six-week peak intraday trading, reaching $63.
For the week, both benchmarks rose about 4%.
On top of that, WTI is up nearly 19% on the year and 27% higher from its Christmas Eve low of $42.36. Brent is showing a near-17% gain year to date.
Friday’s rally was also spurred by a Bloomberg report that the Saudi and Russian energy ministers had spoken on the phone Monday and that Moscow was trying to accelerate its contribution to the OPEC+ cuts and make them run more “smoothly”. The Russian minister Alexander Novak was quoted saying that he would try to discuss the cuts with his Saudi counterpart Khalid al-Falih at the Jan. 22-25 Davos World Economic Forum.
Production cuts aside, another boost for crude futures came from a Bloomberg report that China, the world’s largest oil buyer, had offered to raise its annual imports from the U.S. by more than $1 trillion to offset their trade war. But Trade Representative Robert Lighthizer was also reported to be resisting the offer as Beijing planned to make the upgrade over a six-year period, rather than instantly, as preferred by the Trump administration.
Higher prices of stocks on Wall Street also helped oil, with the three main U.S. equity indexes all showing gains of more than 1% each.
Oil was slower to rally in Asian and European trading after the International Energy Agency said it expected the market rebalancing to be gradual despite OPEC cuts, as the U.S. in 2019
“will reinforce its leadership as the world’s number one crude producer. The journey to a balanced market will take time, and is more likely to be a marathon than a sprint.”
Scott Shelton, ICAP (LON:NXGN)’s Durham, N.C.-based energy futures broker and commentator, agreed, calling the IEA report “a good synopsis of the market“.
The Energy Information Administration said that U.S. crude production had reached 11.9 million bpd as of last week, one million more than averaged in 2018. It is now forecasting an output of 13 million bpd by 2020 and for the U.S. to become a net exporter of oil by then.
See also:
- Oil Prices Jump as IEA Highlights OPEC Cuts
- Oil Hits Two-Month High as China Truce Signals Brighter Outlook (Bloomberg)
Natural Gas (ETF Daily News)
Natural gas prices and related ETFs continued to heat up on projects that the cold weather conditions could linger into February.
The United States Natural Gas Fund (UNG) gained 0.7% Thursday as Nymex natural gas futures were 1.4% higher to $3.43 per million British thermal units.
NatGasWeather said, according to Natural Gas Intelligence:
“While prices sold off sharply Wednesday, we continue to view weather sentiment as at least moderately bullish, aided by the overnight European weather model adding some HDDs back compared to Wednesday’s data.”
Bespoke Weather Services also said that based on the latest guidance it expects cold risks rising into early February, pointing to models showing a “significant” negative Eastern Pacific Oscillation and a “growing” negative North Atlantic Oscillation that could
“deliver a sustained cold shot to end January that rivals what we see over the weekend. This remains likely to linger at least through Week 3 as we see solid staying power with any stronger air.”
Analyzing Natural Gas Prices
Nevertheless, natural gas prices still pulled back from earlier highs in the morning after the U.S. Energy Information administration revealed domestic supplies of natural gas dipped by 81 billion cubic feet for the week ended January 11, compared to estimates of 70bc to 80bcf and the five-year average of 218 billion for the period.
Total natural gas inventories stood at 2.533 trillion cubic feet, or down 77 billion cubic feet year-over-year, and 327 billion below its five-year average.
NatGasWeather said:
“It was warmer than normal over almost the entire country” during this week’s storage report period, “especially so across the Midwest and central U.S..”
With supply hovering below historical averages, traders are looking more closely to the demand side, especially to weather forecasts ahead that point to any signs of cold weather heating demand.
For more information on the natgas market, visit our natural gas category.
The United States Natural Gas Fund L.P. (UNG) was trading at $27.83 per share on Friday afternoon, down $0.44 (-1.56%). Year-to-date, UNG has gained 19.34%, versus a 0.35% rise in the benchmark S&P 500 index during the same period.
UNG currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #52 of 108 ETFs in the Commodity ETFs category.
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