Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 3.15%
U.S. stocks were higher after the close on Friday, as gains in the Oil & Gas, Financials and Industrials sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average gained 3.15% to hit a new 3-months high, while the S&P 500 index added 2.62%, and the NASDAQ Composite index climbed 2.06%.
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The best performers of the session on the Dow Jones Industrial Average were Boeing Co (NYSE:BA), which rose 11.46% or 21.13 points to trade at 205.43 at the close. Meanwhile, Exxon Mobil Corp (NYSE:XOM) added 8.11% or 3.98 points to end at 53.08 and Raytheon Technologies Corp (NYSE:RTX) was up 6.75% or 4.56 points to 72.07 in late trade.
The worst performers of the session were Walmart Inc (NYSE:WMT), which fell 0.45% or 0.55 points to trade at 121.56 at the close. Pfizer Inc (NYSE:PFE) declined 0.06% or 0.02 points to end at 35.99 and Johnson & Johnson (NYSE:JNJ) was up 0.39% or 0.57 points to 147.30.
The top performers on the S&P 500 were Occidental Petroleum Corporation (NYSE:OXY) which rose 33.70% to 20.79, Apache Corporation (NYSE:APA) which was up 23.62% to settle at 16.07 and Royal Caribbean Cruises Ltd (NYSE:RCL) which gained 20.37% to close at 69.44.
The worst performers were Nektar Therapeutics (NASDAQ:NKTR) which was down 3.59% to 22.27 in late trade, Clorox Co (NYSE:CLX) which lost 3.27% to settle at 197.57 and Cboe Global Markets Inc (NYSE:CBOE) which was down 3.16% to 97.84 at the close.
The top performers on the NASDAQ Composite were Oasis Petroleum Inc (NASDAQ:OAS) which rose 126.21% to 1.260, Extraction Oil & Gas Inc (NASDAQ:XOG) which was up 53.24% to settle at 0.425 and Destination XL Group Inc (NASDAQ:DXLG) which gained 52.22% to close at 0.548.
The worst performers were Dolphin Entertainment Inc (NASDAQ:DLPN) which was down 40.24% to 0.9800 in late trade, Titan Medical Inc (NASDAQ:TMDI) which lost 33.76% to settle at 1.0400 and Cinedigm Corp (NASDAQ:CIDM) which was down 24.52% to 2.7400 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2443 to 455 and 48 ended unchanged; on the Nasdaq Stock Exchange, 2007 rose and 687 declined, while 47 ended unchanged.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 5.00% to 24.52 a new 3-months low.
Gold Futures for August delivery was down 2.26% or 39.05 to $1688.35 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in July rose 4.12% or 1.54 to hit $38.95 a barrel, while the August Brent oil contract rose 4.95% or 1.98 to trade at $41.97 a barrel.
EUR/USD was down 0.40% to 1.1291, while USD/JPY rose 0.42% to 109.59.
The US Dollar Index Futures was up 0.29% at 96.938.
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The dollar was up on Friday morning in Asia, rallying from its losses during the previous session.
Investors turned to the safe-haven asset after U.S. data said that 1.877 million Americans claimed unemployment during the previous week, higher than the forecasted 1.8 million claims.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.11% to 96.765 by 11:42 PM ET (4:42 AM GMT).
Investors are now looking to Friday’s non-farm payrolls report, due to be released later in the day. Payrolls are forecast to fall by 8 million.
But optimism over a global economic recovery from COVID-19 continues to remain high, with investors expecting further stimulus measures from governments and the expected development of a COVID-19 vaccine to further boost economic recovery.
According to Johns Hopkins University data, there are over 6.6 million COVID-19 cases and almost 400,000 deaths globally as of June 5.
The USD/JPY pair was up 0.05% to 109.18, and the USD/CNY pair gained a modest 0.01% to 7.1081.
The AUD/USD pair was up 0.08% to 0.6947 and the NZD/USD pair jumped 0.11% to 0.6469.
The GBP/USD pair held steady at 1.2595.
Meanwhile, Asian risk currencies such as the AUD basked in the aftermath of the European Central Bank on Thursday increasing the size of its Pandemic Emergency Purchase Program (PEPP).
ECB will now spend EUR1.35 trillion ($1.521 trillion), up from EUR 750 billion, to mitigate the economic impact of COVID-19. The program has also been extended to at least June 2021, and ECB pledged to reinvest the proceeds until the end of 2022 at the earliest.
See also:
- Forex – Dollar Gains on China Tensions; Euro Awaits ECB
- Forex – Euro Strengthens as ECB Generates Optimism
- Euro-Dollar Rides Wave of Stimulus to 12-Week Highs
A surprise leap in U.S. jobs numbers for May struck a vicious blow to safe havens and gold bugs’ hopes of advancing toward the $1,800 mark.
Gold futures fell nearly 3% Friday, falling off their $1,700 perch, after the Labor Department said in its nonfarm payrolls report that 2.5 million Americans re-entered the workforce in May. Stocks on Wall Street rallied on the news, with the Dow jumping more than 3%. The dollar, a contrarian trade to gold, also rose, though by a more modest 0.3%.
The May payrolls report confounded economists who had predicted a job loss of 8 million in May as the coronavirus kept parts of the U.S. economy closed for a third straight month.
The report also jarred with separate data released a day earlier by the Labor Department, which said it received weekly unemployment claims for the first time from 1.9 million Americans, bringing to nearly 43 million the number receiving jobless insurance since the Covid-19 hit home in March. Gold prices jumped 1% on Thursday, reacting to the jobless claims numbers.
U.S. gold for August delivery settled down $44.40, or 2.6%, at $1,683 per ounce on New York’s Comex. It was the sharpest one day for Comex gold in nine weeks. For the current week itself, August gold lost 2.5%.
Spot gold, which tracks real-time trades in bullion, fell by $32.47, or 1.9%, to $1,681.68 by 2:55 PM ET (19:55 GMT).
Ed Moya, analyst at New York’s OANDA, said:
“Gold traders rushed for the exits after they were stunned by the robust nonfarm payroll report. It will be hard for the Fed to remain extremely accommodative if the world’s largest economy is already in recovery mode.”
The Federal Reserve, the U.S. Treasury and Congress have jointly approved and disbursed trillions of dollars in loans, grants and outright aid to businesses and individuals in recent months because of the Covid-19-triggered economic downturn.
Some analysts, however, remained optimistic that gold would regain some upward momentum in the near-term despite the risk rally in stocks.
George Gero, managing director in charge of the precious metals portfolio at RBC Wealth Management in New York, said:
“I expect a return by next week to the basics of global economic recovery, before more headlines on Middle East worries, China-U.S. tariffs, debt and creeping – not negative interest rates – give gold a leg up.”
Moya concurred with that view:
“Gold might not get much more support from the Fed, but geopolitical risks, second wave concerns, and an eventually weaker U.S. dollar should keep the longer-term bullish outlook intact.”
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Oil prices jumped about 6% after a surprise rebound in US jobs numbers in May. Speculation that OPEC will extend production cuts at its Saturday video meeting also pushed global crude benchmark Brent above the $40 per barrel ceiling again, for a three-month high.
Ed Moya, analyst at New York’s OANDA, said, referring to the May addition of 2.5 million jobs that countered analysts’ expectations for a loss of 8 million:
“The oil price rally went into overdrive after a surprisingly robust U.S. labor market report.”
“The economic recovery is already happening and that could do wonders for crude consumption,” said Moya, adding that crude was also climbing on signs that all countries in the OPEC+ group meeting Saturday were agreeable to extending supply quotas, with even “the cheaters promising they will make up their part in the coming months.”
The Saudis and Russians have agreed to support an extension into July of the 9.7 million barrels per day cuts agreed under the multinational OPEC+ agreement struck in April. The oil producing titans were also thinking of imposing conditions for countries that haven’t complied with reduction quotas under the deal, said sources familiar with the situation.
New York-traded West Texas Intermediate futures settled up $2.14, or 5.7%, at $39.55 per barrel by 2:00 PM ET (18:00 GMT). The gains kept the U.S. crude benchmark within striking reach of $40 and on track to a 11% gain on the week.
London-traded Brent rose $2.31, or 6%, to settle the regular U.S. trading session at $42.30. Earlier, Brent hit a session peak of $42.45, its highest since early March.
Notwithstanding Friday’s rally, both WTI and Brent are down about 35% this year. But the U.K. benchmark is also up 120% from the end of April. Its U.S. peer has, meanwhile, gained nearly 300% over the same stretch. WTI’s rally is particularly notable, coming off sub-zero prices in late April.
Some analysts have, however, cautioned that the rally in crude may be getting too far, without corresponding gains in U.S. fuel demand.
The Energy Information Administration reported that U.S. gasoline inventories rose 2.8 million barrels last week, versus forecasts for a rise of just about 1 million barrels.
More startling were distillate stockpiles led by diesel. These soared by 9.9 million barrels, compared with expectations for a build of about 2.7 million barrels. Distillate inventories alone have risen by more than 51 million barrels over the past eight weeks.
There are also worries that U.S. oil drillers who made deep production cuts just two months ago may start bringing a lot of that back online based on the upward momentum in WTI, rather than actual demand for gasoline or diesel.
Such action could ultimately short circuit the oil rally. Case in point was the weekly oil rig count, an indicator of future production, reported by industry firm Baker Hughes on Friday that showed a decline of just 16. Oil rigs had fallen by more than 60 in certain stretches between March and April when the selloff from oil triggered by the coronavirus was at its peak.
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Natural Gas
No report this week.
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