Written by Investing.com Staff, Investing.com
U.S. stocks mixed at close of trade; Dow Jones Industrial Average up 0.39%
U.S. stocks were mixed after the close on Friday, as gains in the Utilities, Healthcare and Industrials sectors led shares higher while losses in the Oil & Gas, Consumer Services and Consumer Goods sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average rose 0.39%, while the S&P 500 index gained 0.01%, and the NASDAQ Composite index declined 0.36%.
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The best performers of the session on the Dow Jones Industrial Average were Caterpillar Inc (NYSE:CAT), which rose 2.25% or 3.71 points to trade at 168.75 at the close. Meanwhile, Boeing Co (NYSE:BA) added 1.89% or 3.11 points to end at 167.35 and UnitedHealth Group Incorporated (NYSE:UNH) was up 1.64% or 5.33 points to 329.90 in late trade.
The worst performers of the session were Apple Inc (NASDAQ:AAPL), which fell 1.40% or 1.69 points to trade at 119.02 at the close. Goldman Sachs Group Inc (NYSE:GS) declined 1.15% or 2.39 points to end at 206.21 and Chevron Corp (NYSE:CVX) was down 0.84% or 0.62 points to 72.89.
The top performers on the S&P 500 were General Electric Company (NYSE:GE) which rose 6.11% to 7.29, Alliance Data Systems Corp (NYSE:ADS) which was up 4.44% to settle at 55.00 and Pfizer Inc (NYSE:PFE) which gained 3.83% to close at 37.95.
The worst performers were JB Hunt Transport Services Inc (NASDAQ:JBHT) which was down 9.73% to 128.04 in late trade, Schlumberger NV (NYSE:SLB) which lost 8.83% to settle at 14.97 and Halliburton Company (NYSE:HAL) which was down 6.27% to 12.25 at the close.
The top performers on the NASDAQ Composite were Kaixin Auto Holdings (NASDAQ:KXIN) which rose 55.64% to 2.070, SG Blocks Inc (NASDAQ:SGBX) which was up 35.15% to settle at 2.7300 and Code Chain New Continent Ltd (NASDAQ:CCNC) which gained 34.15% to close at 1.100.
The worst performers were Calyxt Inc (NASDAQ:CLXT) which was down 21.27% to 3.96 in late trade, Del Taco Restaurants Inc (NASDAQ:TACO) which lost 21.27% to settle at 8.18 and Adaptimmune Therapeutics Plc (NASDAQ:ADAP) which was down 20.13% to 6.31 at the close.
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1800 to 1262 and 90 ended unchanged; on the Nasdaq Stock Exchange, 1517 fell and 1353 advanced, while 80 ended unchanged.
Shares in Caterpillar Inc (NYSE:CAT) rose to 52-week highs; rising 2.25% or 3.71 to 168.75. Shares in Kaixin Auto Holdings (NASDAQ:KXIN) rose to 52-week highs; rising 55.64% or 0.740 to 2.070.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 1.63% to 27.41.
Gold Futures for December delivery was down 0.32% or 6.10 to $1902.80 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in November fell 0.46% or 0.19 to hit $40.77 a barrel, while the December Brent oil contract fell 0.81% or 0.35 to trade at $42.81 a barrel.
EUR/USD was up 0.11% to 1.1719, while USD/JPY fell 0.04% to 105.39.
The US Dollar Index Futures was down 0.17% at 93.705.
Dow Rises as Strong Retail Sales Suggest Consumer Remains Healthy
Australia stocks lower at close of trade; S&P/ASX 200 down 0.54%
The dollar edged higher in early European trade Friday, heading for its best week of the month as rising coronavirus cases prompt nervous traders to seek out this safe haven.
At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up just 0.01% at 93.873, posting gains of around 0.8% this week, its best weekly performance since late September.
Elsewhere, EUR/USD was down 0.1% at 1.1697, down over 1% this week, while USD/JPY was down 0.1% at 105.33. The risk-sensitive AUD/USD was hit hardest, dropping 0.2% to 0.7076, off over 2% this week to a more than two week low.
The prime driver of this move back into the dollar as a safe haven has been the spike in Covid-19 cases on both sides of the Atlantic, triggering fears of fresh lockdowns and worries over the detrimental impact on economic recovery.
In Europe, London is set to enter a tighter lockdown from midnight, while Paris, and a number of other major French cities, is set to suffer a curfew for the next four weeks. The news isn’t much better in the U.S., with Midwestern states battling a surge of new cases as temperatures drop.
Throw in U.S. initial jobless claims moving in the wrong direction once again and little chance of new fiscal stimulus ahead of November’s elections, and it’s easy to see why traders may choose to shun riskier currencies at this time. Analysts at ING said in a research note:
“With the probability of a pre-election U.S. fiscal stimulus declining further overnight and the ongoing deterioration of the Covid situation in Europe (accompanied by further restrictions, the latest being the night-time curfew in selected French cities, including Paris), the dollar should retain support.”
Elsewhere, GBP/USD dropped 0.2% to 1.2893, 1.2% lower this week after suffering heavy selling overnight following the European Union’s demand that Britain offer more concessions to secure a trade deal or brace for a disorderly end to the post-Brexit transition period in three months.
U.K. Prime Minister Boris Johnson is set to respond Friday, but given it was his hardline stance on the negotiations which propelled him to power, backing down will be complicated.
The United Kingdom formally left the EU on Jan. 31, but the two sides are haggling over a deal that would govern around $900 billion in annual trade when informal membership – known as the transition period – ends on Dec. 31.
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Gold prices ended a tumultuous week lower as the White House’s back-and-forth on a new coronavirus relief deal hurt those with long positions in the yellow metal.
U.S. gold for December delivery settled at $1,906.40 an ounce on New York’s Comex, down $2.50, or 0.1%.
For the week, December gold lost about 1%, most of it from Tuesday’s 1.8% plunge after skepticism expressed by Treasury Secretary Steven Mnuchin on the chance of reaching a new Covid-19 stimulus deal with House Speaker Nancy Pelosi.
Spot gold, which reflects real-time trades in bullion, was down $6.63, or 0.4%, at $1,902.06 by 1:49 PM ET (17:49 GMT).
TD Securities said in a note:
“With the consolidation in gold having likely run its course, the yellow metal is now tracking closely to other momentum-crash precedents, which suggest continued range-bound markets and consolidation until the next catalyst. With that said, stimulus-on/stimulus-off newsflow impacts price action on a day-to-day within the range.”
Mnuchin said Tuesday that he did not expect to reach a deal on a new instalment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act with political rival Pelosi before the Nov. 3 U.S. election.
Congress, led by Pelosi and the Democrats, approved the original CARES package in the second quarter of this year, dispensing roughly $3 trillion as paycheck protection for workers, loans and grants for businesses and other personal aid to qualifying US citizens and residents.
Democrats have been locked in a stalemate since with Republicans, who control the Senate, on a successive package to the CARES, arguing over the size of the next relief, as thousands of Americans, particularly those in the airlines sector, risked losing their jobs without further aid. President Donald Trump, who seeks a second term of office in the Nov. 3 election, has accused Pelosi of playing political football over the issue. The House Speaker retorted that any stimulus should be to the advantage of all Americans, and not for Trump’s political expediency.
Following Mnuchin’s remarks on Tuesday, more confusion has reigned on the matter.
The treasury secretary hinted at a modest and “targeted” package, suggesting that Pelosi move some $300 billion of previously allotted money to needy Americans. Trump floated a $1.8 trillion package, while rambling that he might even do more than the $2.2 trillion demanded by Pelosi. Senate Majority Leader Mitch McConnell, meanwhile, said he could only get votes for a $500 billion deal.
Stimulus talks aside, gold has been supported by a spike in European Covid-19 caseloads, as Italy again moved near the danger zone last seen in March while the U.K. and France imposed new movement restrictions. In the United States, new cases are up in 39 of the 50 U.S. states.
Craig Erlam, analyst at New York’s OANDA, said:
“Gold has aligned itself with riskier assets this year so a number of things could be the catalyst for an explosion higher, be it a COVID vaccine, US stimulus deal, perhaps even a smooth uncontested election. The downside risks remain considerable though which is why we’re increasingly seeing this fence sitting. No stimulus or vaccine announcement – or further setbacks in trials – and a contested election in the coming weeks at a time when COVID cases are rising fast could be very negative for risk appetite and hit gold hard,”
Erlam added that a test of $1,800 was still possible.
TD Securities also cautioned that prevailing macro tailwinds could prod hedge funds to liquidate gold:
“Indeed, the trigger to catalyze a modest liquidation now stands at $1893/oz. A trigger of this level could potentially mark peak capitulation as even systematic trend followers would be set to liquidate some gold length.”
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Oil ended the week little changed as a drop in stockpiles of crude and diesel countered concerns about market direction amid surging Covid-19 caseloads.
New York-traded West Texas Intermediate, the key indicator for U.S. crude prices, settled at $40.88 per barrel, up 0.7% on the week although it was down 8 cents, or 0.2%, on the day.
London-traded Brent crude, the global benchmark for oil, was, however, down for both the day and week.
Brent settled Friday’s trade at $42.93 per barrel, down 23 cents, or 0.5%. For the week, the global crude gauge slid 8 cents, or 0.2%.
U.S. crude stockpiles tumbled 3.8 million barrels last week after rising by just over 500,000 barrels the previous week, the Energy Information Administration said Thursday.
The EIA also reported that distillates inventories plunged by 7.2 million barrels for the week ended Oct. 9 versus a slide of just 962,000 in the week to Oct. 2.
Global oil inventories, which ballooned in the second quarter as fuel demand collapsed, are currently falling at a clip of around 3 million barrels a day, Gunvor chief executive Torbjorn Tornqvist told Bloomberg in an interview published on Thursday. U.S. inventories have fallen in all but two of the last 12 weeks, and last week’s declines were considerably sharper than expected.
But while the drawdowns looked good for supply-demand optics, there were also concerns they could be distorted by precautionary reactions related to the shutdowns forced by Hurricane Delta, which struck Louisiana on Monday as a Category 2 storm. Nearly 92% of all oil production in the U.S. Gulf of Mexico was shuttered by Delta. With most of those facilities having reopened since, output and stockpiles could rise again in coming weeks.
This week’s global spike in Covid-19 caseloads has also raised alarm across markets. Infections in Italy again moved near the danger zone last seen in March, while the U.K. and France imposed new movement restrictions. In the United States, new cases are up in 39 of the 50 U.S. states.
Reuters reported that the OPEC+ bloc of producers – whose technical experts met in Vienna on Thursday to discuss the state of the global oil market – fear that a fresh wave of the pandemic will hit demand and end the slow process of rebalancing that has been in progress since the summer.
The intention of the OPEC+ bloc, which includes producers such as Russia, is to start raising output again as inventories approach their historical norms. Their current deal on output restraint foresees them raising production by nearly two million barrels a day at the start of next year, on the assumption that inventories continue to fall.
Reuters noted that it’s only the worst-case scenario considered by OPEC+’s experts on Thursday that supply/demand could return to a surplus. Even so, that’s gloomier than any of the scenario entertained by the bloc a month earlier.
Another factor complicating the supply picture is the return of Libyan production after months of disruption from civil war. The north African country, which is an OPEC member but which isn’t covered by the output restraint deal, is now producing some 500,000 barrels a day and some forecasts say it could rise to 700,000 b/d or more by year end.
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Natural Gas (Hellenic Shipping News)
US natural gas in storage rose roughly in line with analysts’ expectations and the five-year average last week, but the Henry Hub winter strip continues to slip as power demand fades entering the shoulder season.
Storage inventories rose 76 Bcf to 3.756 Tcf for the week ended Sept. 25, the US Energy Information Administration reported the morning of Oct. 1.
After the survey missed the mark widely in both directions over the past two weeks, this injection was only slightly less than an S&P Global Platts’ survey of analysts calling for a 78 Bcf build. Responses to the survey proved wide though, ranging from injections of 61 Bcf to 102 Bcf. The injection measured less than the 109 Bcf build reported during the same week a year ago, as well as the five-year average gain of 78, according to EIA data.
The injection was below the 109 Bcf build reported during the same week a year ago, as well as the five-year average increase of 78 Bcf, according to EIA data.
The US supply-and-demand balance during the week ended Sept. 25 saw little net change week on week. Supply was down 1.1 Bcf/d week on week to average 89.4 Bcf/d, led by an 800 MMcf/d decline in onshore production, mainly stemming from reduced Northeast output, according to S&P Global Platts Analytics. Downstream, total demand fell by 1.4 Bcf/d to an average of about 80 Bcf/d for the week. A 1.8 Bcf/d drop in power burn demand and a 1.4 Bcf/d drop in LNG feedgas deliveries were partly counterbalanced by a combined 1.7 Bcf/d increase in residential-commercial and industrial demand.
Storage volumes now stand 471 Bcf, or 14%, above the year-ago level of 3.285 Tcf and 405 Bcf, or 12%, more than the five-year average of 3.351 Tcf. The surplus versus last year has been reduced by more than 400 Bcf over the course of the injection season.
The NYMEX Henry Hub November contract shed 6 cents to $2.47/MMBtu following the release of the weekly storage report. Declines extended through the winter strip, with December through March trading roughly 3 cents lower.
S&P Global Platts Analytics’ supply-and-demand model currently forecasts a 66 Bcf injection for the week ending Oct. 2, which would lower the surplus to the five-year average by 20 Bcf as about six net injections remain before the flip to the winter withdrawal season.
Total supplies this week are up 1.1 Bcf/d to average 90.5 Bcf/d, mainly from a nearly 1 Bcf/d rise in production that has been split among both onshore and offshore production wells. Downstream, total demand is up 1.7 Bcf/d on the week to an estimated 81.6 Bcf/d, led by a 1 Bcf/d recovery in LNG feedgas deliveries, and further bolstered by a 600 MMcf/d recovery in power plant deliveries.
Source: Platts
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