Written by Investing.com Staff, Investing.com
U.S. stocks mixed at close of trade; Dow Jones Industrial Average down 0.04%
U.S. stocks were mixed after the close on Friday, as gains in the Utilities, Technology and Telecoms sectors led shares higher while losses in the Oil & Gas, Basic Materials and Consumer Services sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average lost 0.04%, while the S&P 500 index climbed 0.24%, and the NASDAQ Composite index gained 0.43%.
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The best performers of the session on the Dow Jones Industrial Average were UnitedHealth Group Incorporated (NYSE:UNH), which rose 1.06% or 3.03 points to trade at 289.94 at the close. Meanwhile, The Travelers Companies Inc (NYSE:TRV) added 0.94% or 0.93 points to end at 100.10 and Procter & Gamble Company (NYSE:PG) was up 0.88% or 0.98 points to 112.60 in late trade.
The worst performers of the session were Chevron Corp (NYSE:CVX), which fell 1.91% or 1.76 points to trade at 90.28 at the close. Caterpillar Inc (NYSE:CAT) declined 1.39% or 1.59 points to end at 112.47 and Boeing Co (NYSE:BA) was down 1.06% or 1.47 points to 137.53.
The top performers on the S&P 500 were Arconic Inc (NYSE:ARNC) which rose 13.83% to 12.84, Coty Inc (NYSE:COTY) which was up 12.61% to settle at 3.75 and American Tower Corp (NYSE:AMT) which gained 6.25% to close at 242.43.
The worst performers were Hewlett Packard Enterprise Co (NYSE:HPE) which was down 11.49% to 9.17 in late trade, Foot Locker Inc (NYSE:FL) which lost 8.49% to settle at 26.83 and Wynn Resorts Limited (NASDAQ:WYNN) which was down 5.89% to 78.25 at the close.
The top performers on the NASDAQ Composite were GreenPro Capital Corp (NASDAQ:GRNQ) which rose 72.22% to 0.6200, XpresSpa Group Inc (NASDAQ:XSPA) which was up 70.21% to settle at 0.8800 and Sundial Growers Inc (NASDAQ:SNDL) which gained 39.69% to close at 0.85.
The worst performers were Recon Technology Ltd (NASDAQ:RCON) which was down 43.51% to 2.090 in late trade, Jaguar Health Inc (NASDAQ:JAGX) which lost 31.41% to settle at 0.4390 and Luckin Coffee (NASDAQ:LK) which was down 30.85% to 1.39 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 1570 to 1277 and 77 ended unchanged; on the Nasdaq Stock Exchange, 1509 rose and 1138 declined, while 70 ended unchanged.
Shares in Luckin Coffee (NASDAQ:LK) fell to all time lows; falling 30.85% or 0.62 to 1.39.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 4.64% to 28.16.
Gold Futures for June delivery was up 0.74% or 12.80 to $1734.70 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in July fell 1.50% or 0.51 to hit $33.41 a barrel, while the July Brent oil contract fell 2.36% or 0.85 to trade at $35.21 a barrel.
EUR/USD was down 0.42% to 1.0903, while USD/JPY rose 0.02% to 107.63.
The US Dollar Index Futures was up 0.40% at 99.800.
See also:
Stocks – Dow Notches Weekly Win After Cutting Losses to End Flat
Stocks – Dow Eases From Lows, but Sentiment Fragile as U.S.-China Tensions Flare
The U.S. dollar was in demand during early European trade Friday as simmering U.S.-China tensions flared up, prompting investors to seek the traditional safe haven.
At 2:45 AM ET (0645 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 99.627, up 0.2%, EUR/USD dropped 0.2% to 1.0925, while GBP/USD fell 0.2% to 1.2203.
The latest source of Sino-U.S. disagreement came after Beijing moved to impose a new security law on Hong Kong after last year’s pro-democracy unrest.
The decision drew a warning from President Donald Trump that Washington would react “very strongly” against the attempt to gain more control over the former British colony.
The yuan has also been hit by China’s decision to omit an economic growth target for 2020, which renewed concerns that the fallout from the coronavirus pandemic will last longer than originally expected.
At 2:45 AM, USD/CNY traded at 7.1238, up 0.1%, hitting a two-month high. The offshore yuan, which trades in a more flexible range, also fell to a two-month low. The Aussie, which is widely seen as a rough proxy for Chinese commodity demand, was the day’s biggest loser, falling 0.6%.
Washington and Beijing also have differing opinions over telecoms equipment giant Huawei Technologies’ access to advanced technology and as well as Beijing’s response to the coronavirus outbreak.
Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo, said:
“There have been problems between the United States and China for quite a while now. Some very short-term players are changing positions from one day to the next, which makes it difficult to see the trend, but overall the dollar looks to be supported.”
In Japan, core consumer prices fell for the first time in more than three years in April on an annual basis.
However, the yen showed some strength after the central bank extended the deadline for a series of measures it has deployed to combat the virus fallout, including accelerated corporate debt buying, by six months to March 2021, but kept its short-term interest rate target of -0.1% unchanged.
USD/JPY traded at 107.46, down 0.1%
In emerging markets, the central banks in Turkey and South Africa both took advantage of their currencies’ recent rebounds to cut interest Thursday in effort to help their battered economies. The llira and rand both dipped but held on to most of their gains.
USD/TRY traded 0.2% higher at 6.7946 and USD/ZAR up 0.8% at 17.7113.
The lira was still up 1.5% on the week, while the rand was up 4.6%.
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China’s stirring the hornet’s nest of Hong Kong’s democracy again sent safe-haven seekers piling into gold Friday, reducing the yellow metal’s weekly losses accumulated on the back of optimism over the U.S. recovery from Covid-19.
U.S. gold futures for June settled up $13.60, or 0.8%, at $1,735.50 per ounce after China’s ruling Communist Party set in motion a controversial national security law for Hong Kong that could be a major blow to the city’s freedoms.
Spot gold, which tracks real-time trades in bullion, rose $6.02, or 0.4%, to $1,733.62 by 3:30 PM ET (19:30 GMT) after Beijing’s National People’s Congress omitted its 2020 economic target while pledging to issue 1 trillion yuan ($140 billion) of special treasury bonds to support companies and regions hit by the pandemic.
For the week, gold futures were down almost $21, or 1.2%, while bullion dipped about $10, or 0.5%.
Joshua Graves, strategist at RJO Futures in Chicago,wrote:
“Gold futures have, once again, showed strength over the past week, pushing just short of the contract high of $1,789 back in March, only to fall back toward $1,735. It’s difficult to say whether we will be able to make new highs given the stock market strength, and the endless sideways price action over the past few months. Gold is a buy around $1,675, and a sell around $1,750 and it’s been that simple. Gold ETFs continue to expand for the 20th straight week with unrest in Hong Kong after China’s recent crackdown, and explosive federal government spending all reasons to be long gold.”
See also:
- Gold Moves Higher as Job Losses Fuel China-U.S. Tensions
- Gold Up as U.S.-Chinese Tensions Rise Over Hong Kong National Security Law
- Gold Back Under $1,750 as Data Show Flattening of the U.S. Job Loss Curve
Oil prices fell for the first time in more than a week after top buyer China omitted its growth target for 2020 and renewed its showdown with pro-democracy protesters in Hong Kong. The slide comes ahead of the U.S. Memorial Day weekend, which will be the next stress test for $30 WTI.
Phil Flynn, the analyst at Chicago’s Price Futures Group, who’s typically bullish on oil wrote:
“The tendency of the oil market to correct and top often happens ahead of holiday weekends. Still, this market deserves to correct. The historic turnaround from sub-zero pricing to an incredible comeback, it only stands to reason that the market may want to level off and consolidate as it tries to judge demand and the impact on what is the traditional start of the summer driving season, Memorial Day.”
Traders and investors will be on the lookout for anecdotal and other data on U.S. driving and gasoline usage between Friday night and Monday’s Memorial Day holiday, given the absence of a typical forecast on road trips for the occasion by the American Automobile Association. The AAA has said it is foregoing its annual Memorial Day drivers’ survey for the first time in 20 years as the Covid-19 pandemic had made it impossible for it to gather appropriate data. Last year, some 43 million Americans took to the road last year for Memorial Day, the second-highest since 2005, the association said.
U.S. West Texas Intermediate crude’s front-month contract, July, settled down 67 cents, or 2%, at $33.25 per barrel.
Brent, the London-traded global benchmark for oil, slid by 93 cents, or 2.6%, to settle at $35.13.
Still, WTI finished up 13% on the week and Brent 8%, for their fourth-straight weekly gain that marked oil’s best winning streak since December.
WTI also rebounded from Friday’s lows after the weekly rig count published by industry firm Baker Hughes showed drillers cut another 21 oil rigs, bringing to nearly 450 the number lost since the week ended March 18, when lockdowns over the coronavirus began earnestly in the United States and across the world after China started the phenomenon in January.
Craig Erlam at New York’s OANDA said:
“Oil’s dynamics have undoubtedly improved, but the outlook is still highly uncertain and numerous risks lie on the horizon, even before you take recent tensions on China into consideration. There’ll be nothing normal or straightforward about this recovery.”
WTI fell to as low $30.74 earlier after China’s National People’s Congress kicked off a week-long meeting saying it omitted the 2020 economic target, while pledging to issue 1 trillion yuan ($140 billion) of special treasury bonds to support companies and regions hit by the pandemic.
China’s ruling Communist Party also set in motion a controversial national security law for Hong Kong, a move seen as a major blow to the city’s freedoms. The law to ban “treason, secession, sedition and subversion” could bypass Hong Kong’s lawmakers.
See also:
- Crude Oil Slips Back; China’s Moves Threaten Growth
- Oil Drops After China Abandons Economic Growth Target
- U.S. Oil Nears $35 as Herd-Following Hedge Funds Pile In
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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