Written by Investing.com Staff, Investing.com
U.S. stocks lower at close of trade; Dow Jones Industrial Average down 0.68%
U.S. stocks were lower after the close on Friday, as losses in the Healthcare, Technology and Industrials sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average declined 0.68%, while the S&P 500 index fell 0.62%, and the NASDAQ Composite index lost 0.94%.
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The best performers of the session on the Dow Jones Industrial Average were Verizon Communications Inc (NYSE:VZ), which rose 1.79% or 1.00 points to trade at 56.85 at the close. Meanwhile, Caterpillar Inc (NYSE:CAT) added 0.72% or 0.98 points to end at 137.58 and McDonald’s Corporation (NYSE:MCD) was up 0.59% or 1.17 points to 198.72 in late trade.
The worst performers of the session were Intel Corporation (NASDAQ:INTC), which fell 16.24% or 9.81 points to trade at 50.59 at the close. Cisco Systems Inc (NASDAQ:CSCO) declined 2.13% or 1.01 points to end at 46.40 and Pfizer Inc (NYSE:PFE) was down 1.95% or 0.75 points to 37.66.
The top performers on the S&P 500 were Advanced Micro Devices Inc (NASDAQ:AMD) which rose 16.50% to 69.40, FirstEnergy Corporation (NYSE:FE) which was up 7.59% to settle at 29.48 and Darden Restaurants Inc (NYSE:DRI) which gained 3.24% to close at 78.64.
The worst performers were Intel Corporation (NASDAQ:INTC) which was down 16.24% to 50.59 in late trade, KLA-Tencor Corporation (NASDAQ:KLAC) which lost 7.70% to settle at 188.21 and Western Digital Corporation (NASDAQ:WDC) which was down 7.17% to 42.85 at the close.
The top performers on the NASDAQ Composite were Ascena Retail Group Inc (NASDAQ:ASNA) which rose 119.76% to 1.29, Global Eagle Entertainment Inc (NASDAQ:ENT) which was up 53.81% to settle at 3.2300 and Cyren Ltd (NASDAQ:CYRN) which gained 36.64% to close at 1.790.
The worst performers were eHealth Inc (NASDAQ:EHTH) which was down 30.55% to 79.17 in late trade, Arbutus Biopharma Corp (NASDAQ:ABUS) which lost 20.00% to settle at 4.96 and US Energy Corp (NASDAQ:USEG) which was down 18.19% to 5.89 at the close.
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1907 to 905 and 104 ended unchanged; on the Nasdaq Stock Exchange, 2004 fell and 681 advanced, while 71 ended unchanged.
Shares in Advanced Micro Devices Inc (NASDAQ:AMD) rose to all time highs; gaining 16.50% or 9.83 to 69.40.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 0.92% to 25.84.
Gold Futures for August delivery was up 0.53% or 9.95 to $1899.95 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in September rose 0.66% or 0.27 to hit $41.34 a barrel, while the September Brent oil contract rose 0.07% or 0.03 to trade at $43.34 a barrel.
EUR/USD was up 0.53% to 1.1656, while USD/JPY fell 0.66% to 106.14.
The US Dollar Index Futures was down 0.37% at 94.300.
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The dollar was down on Friday morning in Asia, with the U.S. struggling to curb its surging number of COVID-19 cases. Combined with the looming expiry of some stimulus measures at the end of July as well as a record number of unemployment claims, investors are casting doubt over the U.S.’ recovery prospects.
Westpac analyst Richard Franulovich told Reuters:
“The USD bear case continues to sharpen with a break of the 94.65 March lows likely ushering in the next leg down.”
The number of U.S. cases topped 4 million, with over 15.4 million cases globally as of July 24, according to Johns Hopkins University data.
The U.S. reported its first uptick in initial jobless claims since March, with 1.416 million Americans filing for unemployment claims over the last week. The number was higher than analyst forecasts for 1.3 million claims, as well as the previous week’s 1.307 million claims.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.07% to 94.585 by 10:18 AM ET (3:18 AM GMT).
Franulovich also noted the dollar faces a major hurdle in the coming week, with the U.S. Federal Reserve expected to take a dovish outlook at its policy meeting.
Meanwhile, the dollar’s loss was the Euro’s gain, with the European Union reaching agreement on a EUR750 billion ($868.987 billion) COVID-19 rescue package earlier in the week. The agreement boosted the Euro to a 21-month peak against the dollar.
The USD/JPY pair was down 0.28% to 106.56. Markets in Japan are closed for a holiday.
The AUD/USD pair gained 0.25% to 0.7115 and the NZD/USD pair was up 0.11% to 0.6641.
The USD/CNY pair was up 0.05% to 7.0066. U.S-China tensions continue to simmer, with China vowing retaliation for the U.S. order for its Houston consulate to close by Friday. But a flight carrying an unspecified number of U.S. diplomats to Shanghai departed on Wednesday evening.
The GBP/USD pair gained 0.11% to 1.2753.
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Gold prices breached $1,900 an ounce the first time in nine years on Friday, topping out a seven-week long rally powered by assurances of more stimulus measures worldwide to fight the coronavirus.
U.S. gold futures on New York’s Comex settled up $7.50, or 0.4%, at $1,897.50 per ounce. The session peak was $1,904.10, the highest since September 2011, when Comex gold hit a record high of $1,911.60.
For the week, Comex gold rose 4.8%, rallying for a seventh straight week, and closing in on its 2011 all-time high, as well as the next widely anticipated target of $2,000 an ounce.
Eli Tesfaye, precious metals strategist at RJO Futures in Chicago, said:
“We’re almost certainly going to snap the 2011 high by Monday, I think. If it happens, then the next run will be toward $2,000.”
Spot gold, a real-time indicator of trades in gold bullion, was up $12.55, or 0.7% to $1,900.06 by 2:13 PM ET (18:13 GMT). Its session peak of $1,906.68 placed it within striking distance of breaching the record high of $1,920.85 set in September 2011. For the week, spot gold was up 5%.
For the year, Comex gold is up nearly 24% on the year while bullion has gained more than 25%.
The rally comes on the back of low interest rates and trillions of dollars of Covid-19 stimulus passed by governments and global central banks that have debased the dollar and other conventional currencies and heightened inflation fears – a situation which investors typically hedge by buying gold.
This year alone, the U.S. Congress has passed three coronavirus stimulus packages worth $3.3 trillion and is debating a fourth one anticipated to cost another $1 trillion plus. Separately, the Federal Reserve has devised loans and other market and economic support programs worth hundreds of billions of dollars to offset negative effects to growth from the coronavirus. EU leaders, meanwhile, agreed earlier this week on a historic 750 billion euro ($857 billion) stimulus to rescue their economies from the pandemic.
Gold’s strength has also been underpinned by a slump in the dollar this year. The Dollar Index, which measures the performance of the greenback against six major currencies, has slid steadily from 17-year highs of 103.96 in March to below 95 now, its lowest in almost two years.
Ed Moya, analyst at OANDA in New York, said:
“The dollar’s slump is not ending anytime soon as negative real rates in the U.S. make it a lot more attractive to ride the European rally or (the) growth-recovery trade that will boost commodity currencies across the board.”
Gold hasn’t been the only beneficiary of the weak dollar and this year’s stimulus programs.
Silver, the second most-actively traded precious metal on Comex, is up more than 26% this year, outperforming gold which it has trailed for years.
Comex silver settled down 13.80 cents, or 0.6%, at $22.85 per ounce on Friday, sliding for a second day in a row and diverging from gold, which it rallied together with earlier in the week. Despite the combined drop of 1.3% on the week, Comex silver still finished the week up 15.6% – its biggest weekly gain in four months.
Tesfaye of RJO Futures said:
“I think silver has potential to gain much, much more if gold gets to $2,000 target. If you consider that silver was trading at nearly $44 in September 2011 when gold hit that record high, you can see how terribly undervalued it is now.”
See also:
- Gold Hits Pause on March to Record Highs
- Silver, Gold Diverge for First Time in Days After Rallying Together
Crude prices settled mixed on Friday as conflicting signals on the economy, the coronavirus pandemic, and the pounding taken by tech stocks on Wall Street added to investor uncertainty.
New York-traded West Texas Intermediate, the benchmark for U.S. crude futures, settled up 22 cents, or 0.5%, at $41.07 per barrel on Friday. For the week, WTI fell 0.5%.
London-traded Brent, the global benchmark for oil, gained 3 cents to settle at $43.34 per barrel. For the week though, Brent eked out a 0.5% gain.
Ed Moya, an analyst at New York’s online trading platform OANDA, said:
“The risks seem to be growing to the downside for crude and any rallies that do not stem from any major production outages could be short-lived. WTI crude’s tight range is likely ending now as the latest move in Treasuries could spark a broader move across all asset classes.”
Just on Wednesday, the U.S. benchmark hit $42.40, its highest since March, while Brent rose to a four-month peak of $44.88 – keeping to oil bulls’ target of achieving a minimum $45 a barrel for both WTI and Brent in the near term.
Oil has been in a broad rally mode for three months, going from nearly minus $40 to positive $40, likening to the proverbial phoenix rising from its ashes.
The uptrend has held as bulls focused on the demand recovery for gasoline since the lifting of Covid-19 lockdowns in May, despite threats of new curbs on businesses from another wave of the virus.
That aside, next month the Saudi-dominated Organization of the Petroleum Exporting Countries and its allies led by Russia will roll back some 2 million barrels from the 9.6-million barrel per day in production cuts observed since May.
In Friday’s session, crude prices moved up on economic data from Europe, but gains were limited as tensions between the United States and China flared.
China ordered the United States to close its consulate in the city of Chengdu on Friday, responding to a U.S. demand this week that China close its Houston consulate.
The renewed tensions between the world’s top two oil consumers stoked worries about oil demand, which already faces headwinds including rising coronavirus cases in the United States.
On the Covid-19 front, the United States surpassed 4 million confirmed cases and has more than 144,000 deaths, according to Johns Hopkins University data. That contrasted with the global case count of 15 million and 633,000-off fatalities.
The U.S. economy shrank 5 percent in the first three months of 2020 for its sharpest decline since the Great Recession of 2008-09, as most of the 50 states in the country went into lockdown to stem the outbreak of the virus. While most businesses have reopened over the past two months, economists still warn of a double-digit recession by the second quarter – meaning job losses could continue.
The U.S. response to the Covid-19 has also been mixed, to say the least.
On Friday, the Centers for Disease Control and Prevention unveiled new guidelines that seemed to favor the Trump administration’s dictum that schools reopen in fall, even as the U.S. Public Interest Research Group – which represents more than 150 health professionals – urged in an open letter that the country be shut down to stem another major outbreak of the pandemic.
On Capitol Hill, Republicans aligned with President Donald Trump and opposing Democrat lawmakers led by House Speaker Nancy Pelosi wrangled over a new $1 trillion coronavirus bill, after data showed another 1.4 million Americans were added to the unemployment list last week.
On Wall Street, technology issues led losses, with the tech-heavy Nasdaq composite heading for a second-straight weekly loss as top stocks like Apple (NASDAQ:AAPL), Google’s Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) all traded below the flatline.
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Natural Gas (Hellenic Shipping News)
US natural gas in storage rose 56 Bcf in the week ended July 3, according to Energy Information Administration data released July 9, as electric generation boosted demand and the Henry Hub prompt-month contract continues to inch closer to the $2/MMBtu mark.
The estimated 56 Bcf build, to total underground gas storage stocks of 3.133 Tcf, was slightly above consensus expectations of an S&P Global Platts’ survey of analysts, which called for a 55 Bcf build. Responses to the survey ranged from an injection of 42 Bcf to one of 65 Bcf.
The injection was smaller than the 83 Bcf build reported during the corresponding week in 2019 and the five-year average increase of 68 Bcf, according to EIA data.
Summer heat intensified across the US Midwest and Southeast in the week that ended July 3, pushing estimated nationwide power burn to a year-to-date high of 39.9 Bcf/d, according to S&P Global Platts Analytics.
Meanwhile, after bottoming out at 3.8 Bcf/d two weeks ago, LNG feedgas deliveries held above 4 Bcf/d for the second week in a row, helping trim the 18% inventory surplus that will weigh on Henry Hub prices through the end of injection season in October.
The NYMEX Henry Hub balance of summer strip has risen roughly 2 cents to $1.90/MMBtu, shedding half the earlier session gains prior to the storage report release. Spreads from summer to winter have narrowed about 10 cents over the last week to 82 cents from 92 cents, but remain strong.
Storage volumes now stand 685 Bcf, or 28%, above the year-ago level of 2.448 Tcf and 454 Bcf, or 17%, above the five-year average of 2.679 Tcf.
Platts Analytics’ supply and demand model currently expects a 52 Bcf injection for the week ending July 10, which would be 11 Bcf below the five-year average, as supply-and-demand fundamentals draw tighter.
Gas-fired power demand continues to ratchet up deeper into the US cooling season. Year-to-date power burn has been impressive from the perspective of electricity demand, which was relatively lackluster because of a mild winter, followed immediately by the suppressive impact of coronavirus and efforts to mitigate its spread.
However, corresponding pressure to gas prices has provided gas-fired generation the ability to increase market share and dominate the supply stack, displacing an enormous amount of coal-fired generation, according to Platts Analytics.
Through June, electricity demand across the continental US averaged 4% lower year on year, while gas-fired generation managed to increase 7% in the same period. Gas prices at Henry Hub averaged 90 cents/MMBtu lower through the first half of 2020, which facilitated nearly 30% year-on-year declines in coal-fired generation.
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