Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 1.91%
U.S. stocks were higher after the close on Friday, as gains in the Oil & Gas, Consumer Goods and Telecoms sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average rose 1.91%, while the S&P 500 index gained 1.69%, and the NASDAQ Composite index climbed 1.58%.
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The best performers of the session on the Dow Jones Industrial Average were Dow Inc (NYSE:DOW), which rose 4.51% or 1.48 points to trade at 34.33 at the close. Meanwhile, Caterpillar Inc (NYSE:CAT) added 4.49% or 4.82 points to end at 112.11 and Exxon Mobil Corp (NYSE:XOM) was up 4.39% or 1.94 points to 46.18 in late trade.
The worst performers of the session were McDonald’s Corporation (NYSE:MCD), which rose 0.06% or 0.11 points to trade at 181.23 at the close. Microsoft Corporation (NASDAQ:MSFT) added 0.59% or 1.08 points to end at 184.68 and UnitedHealth Group Incorporated (NYSE:UNH) was up 0.70% or 2.00 points to 287.00.
The top performers on the S&P 500 were Helmerich and Payne Inc (NYSE:HP) which rose 13.51% to 17.73, Noble Energy Inc (NASDAQ:NBL) which was up 13.46% to settle at 10.03 and News Corp B (NASDAQ:NWS) which gained 13.29% to close at 11.25.
The worst performers were TripAdvisor Inc (NASDAQ:TRIP) which was down 4.33% to 17.91 in late trade, Motorola Solutions Inc (NYSE:MSI) which lost 3.63% to settle at 131.27 and Fleetcor Technologies Inc (NYSE:FLT) which was down 3.51% to 240.00 at the close.
The top performers on the NASDAQ Composite were Fuel Tech Inc (NASDAQ:FTEK) which rose 93.78% to 0.9100, Protagonist Therapeutics Inc (NASDAQ:PTGX) which was up 83.70% to settle at 14.20 and Everspin Technologies Inc (NASDAQ:MRAM) which gained 51.88% to close at 4.86.
The worst performers were Genius Brands International Inc (NASDAQ:GNUS) which was down 30.51% to 0.5800 in late trade, China Advanced Construction Materials Group Inc (NASDAQ:HHT) which lost 20.31% to settle at 0.510 and Shotspotter Inc (NASDAQ:SSTI) which was down 19.40% to 23.48 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2408 to 482 and 49 ended unchanged; on the Nasdaq Stock Exchange, 2068 rose and 580 declined, while 61 ended unchanged.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 11.01% to 27.98 a new 1-month low.
Gold Futures for June delivery was down 1.22% or 21.00 to $1704.80 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in June rose 4.54% or 1.07 to hit $24.62 a barrel, while the July Brent oil contract rose 4.82% or 1.42 to trade at $30.88 a barrel.
EUR/USD was up 0.06% to 1.0839, while USD/JPY rose 0.38% to 106.67.
The US Dollar Index Futures was down 0.13% at 99.773.
See also:
Stocks – Dow Rallies to Snap Two-Week Losing Streak Amid Bets on Jobs Comeback
Australia stocks higher at close of trade; S&P/ASX 200 up 0.50%
Asian Stocks Up Boosted by NASDAQ Entering Positive Territory
The dollar trimmed its losses on Friday, but experts warn the recent strength of the greenback is on borrowed time, particularly against the euro, as its interest rate advantage is slipping away amid expectations for rates to drop into negative territory next year.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.17% to 98.73, after hitting a session low of $99.45.
The move of lows comes after investors digested a historic loss of U.S. jobs for the month April as the Covid-19 pandemic led to shuttered businesses across the country.
The U.S. lost 20.5 million jobs last month, the worst on record, but below economists’ forecast of 22 million. The unemployment rate jumped to 14.7%.
But with the parts of the country lifting restriction in recent days, many were quick to suggest that worst was over in the labor market as temporary layoffs made up the bulk of layoffs.
Against the backdrop of rising hopes for an economic recovery, the euro is likely to find its footing and recoup some its losses against the greenback, Commerzbank (DE:CBKG) said:
“The Corona crisis brought significantly increased volatility to the EUR-USD exchange rate. Nevertheless, we have not changed the EUR-USD forecast. The higher risk premium for Europe’s currency, from which EUR-USD is suffering, should be partially reduced with the economic recovery.”
In the hunt for yield, meanwhile, investors have favored the U.S. against other countries, some of which have cut rates to below zero.
But this advantage is wearing thin, Commerzbank argues, as U.S. fed funds futures contracts are pricing in a negative fed funds rate in 2021 amid expectations for a recession:
“More importantly, the former interest rate advantage of the U.S. dollar has permanently shrunk. This does not justify a substantial overvaluation of the USD outside of times of crisis. We continue to expect EUR-USD rates around 1.14 by end-2020.”
EUR/USD was up 0.13% to $1.0846, but was on track for weekly loss.
See also:
- Forex – Dollar Dips Amid Negative Rates Concerns
- Dollar Retreats After Investors Spooked by Possibility of Negative Rates
Even the worst U.S. jobs numbers in history couldn’t result in much of a safe-haven bid for gold.
Optimism that the world’s largest economy will recover from the unprecedented blow dealt by the coronavirus propped Wall Street up instead.
The rise in risk appetite for stocks drove gold and the erstwhile safe play dollar down, despite ominous warnings that April’s jobs horror wasn’t over and that the U.S. economy will be even worse off in the second quarter.
Support pledged by Chinese trade negotiators for the Phase 1 of their trade deal with the U.S. also bolstered sentiment on Wall Street.
Friday’s outreach by trade officials in Beijing to their counterparts in Washington was the first since the deal was ratified in January. It also comes after blame heaped by the Trump administration on China lately for its handling of the coronavirus, including allegedly creating it in a lab.
U.S. gold futures for June settled down $11.90, or 0.7%, at $1,713.90 per ounce as Wall Street’s Dow, S&P 500 and Nasdaq indexes all rose more than 1%, betting on U.S. business reopenings from Covid-19-forced lockdowns.
Despite the drop on the day, June futures for gold were up on the week, rising 0.4%.
Spot gold, which tracks real-time trades in bullion, fell $14.29, or 0.8%, to $1,702.30 by 3:25 PM ET (19:25 GMT).
White House Economic Adviser Larry Kudlow, speaking on Fox Business, said he wasn’t sure if the Q2 jobs picture “is as bad as it gets“. Kudlow said:
“I don’t think this pandemic contraction has yet fully run.”
The consumer-driven U.S. economy shrank 4.8% in the first quarter. While that was already the sharpest decline in a quarter since the 2008/09 financial crisis, economists predict that the current quarter would be worse, as the now mostly-reopened economy was unlikely to show much recovery until the July-September stretch.
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Crude prices finished with a second straight week of double-digit gains on Friday after the U.S. oil rig count hit financial crisis lows.
West Texas Intermediate, the benchmark for U.S. crude, settled up $1.19, or 5%, at $24.74 per barrel.
For the week, WTI was up 25%, pushing through with the previous week’s near 17% gain as traders and investors bet on slumping oil production and nascent recovery in demand from a reopening of the U.S. economy from Covid-19 lockdowns. Scott Shelton, energy futures broker at ICAP (LON:NXGN) in Durham, N.C., said:
“WTI is still the cheapest barrel to run in North America and that tells me it should continue to perform.”
London-traded Brent, the global benchmark for oil, finished up $1.51, or 5%, at $30.97. For the week, Brent was up nearly 17%, after last week’s gain of more than 23%.
U.S. oil rigs, as measured by oil services firm Baker Hughes, fell by 33 this week to reach 292. The number had previously never fallen beneath 300, since the 2008/09 financial crisis.
The record low for U.S. oil rigs was 98, seen in November 2002. But a combination of oil and gas rigs, known as the total rig count, hit a record low of 374, after falling by 34 this week, according to Baker Hughes, which has been tracking those numbers since 1940.
See also:
- Breaking-U.S. Oil Rig Count Falls to 292; New Low Since Financial Crisis
- Crude Oil Higher; ‘Great Shut-In’ Underway
Natural Gas (ETF Trends)
The once beaten down natural gas sector-specific exchange traded fund has surged over the past month as U.S. crude oil producers turn off supply and investors bet on higher natgas prices.
The First Trust Natural Gas ETF (NYSEArca: FCG), which tracks natural gas exploration and production companies, was the best performing non-leveraged ETF of the past month, jumping 84.8%.
The historic fall in crude oil prices, which dipped into the negative for the first time ever, on the heels of the collapse in demand in response to the coronavirus outbreak has forced many oil producers to turn off oil wells. The shutdowns not only diminishes the supply of crude oil, but it also reduces a lot of natural gas that is extracted as a byproduct.
Further bolstering the natural gas markets, coal’s share of U.S. electricity generation has steadily declined to about a third from last year, the Wall Street Journal reports.
Both factors have helped drive interest for natural gas and its producers. For example, hedge funds and other speculators last week were net long natgas for the first time since last May, according to Commodity Futures Trading Commission data.
SunTrust Robinson Humphrey analysts upgraded their outlook for shares of seven gas producers by an average of 69%. Additionally, Tudor, Pickering, Holt & Co. recommended EQT, Cabot Oil & Gas Corp. and Tourmaline Oil Corp. to capitalize on near-term gains due to 6 billion to 7 billion cubic feet of gas per day that were cut from the market following the closure of oil wells.
Mark Unferth, a portfolio manager at Alpine Capital Research, told the WSJ, referring to companies that don’t produce much poorly priced oil and natural gas liquids:
“We think the dry gas producers are attractive. We’ve been adding to our exposure the past six weeks and overall it’s about 5% of our portfolio.”
See also:
Rising Natural Gas Prices Are a Hot Bet (The Wall Street Journal)
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