Written by Investing.com Staff, Investing.com
U.S. stocks mixed at close of trade; Dow Jones Industrial Average down 0.36%
U.S. stocks were mixed after the close on Friday, as gains in the Telecoms, Utilities and Technology sectors led shares higher while losses in the Oil & Gas, Financials and Consumer Services sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average lost 0.36%, while the S&P 500 index lost 0.12%, and the NASDAQ Composite index gained 0.14%
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The best performers of the session on the Dow Jones Industrial Average were Home Depot Inc (NYSE:HD), which rose 2.14% or 5.97 points to trade at 285.02 at the close. Meanwhile, Apple Inc (NASDAQ:AAPL) added 1.64% or 2.25 points to end at 139.12 and Salesforce.com Inc (NYSE:CRM) was up 1.88% or 4.17 points to 226.34 in late trade.
The worst performers of the session were International Business Machines (NYSE:IBM), which fell 9.88% or 13.01 points to trade at 118.64 at the close. Intel Corporation (NASDAQ:INTC) declined 8.89% or 5.55 points to end at 56.91 and The Travelers Companies Inc (NYSE:TRV) was down 1.80% or 2.68 points to 146.04.
The top performers on the S&P 500 were Macerich Company (NYSE:MAC) which rose 10.44% to 14.71, SVB Financial Group (NASDAQ:SIVB) which was up 4.63% to settle at 476.67 and Incyte Corporation (NASDAQ:INCY) which gained 4.42% to close at 98.05.
The worst performers were International Business Machines (NYSE:IBM) which was down 9.88% to 118.64 in late trade, Intel Corporation (NASDAQ:INTC) which lost 8.89% to settle at 56.91 and Coty Inc (NYSE:COTY) which was down 8.64% to 6.29 at the close.
The top performers on the NASDAQ Composite were Molecular Data Inc (NASDAQ:MKD) which rose 62.14% to 1.44, AzurRx BioPharma Inc (NASDAQ:AZRX) which was up 57.26% to settle at 1.950 and Adamis Pharma (NASDAQ:ADMP) which gained 43.31% to close at 1.8200.
The worst performers were Qutoutiao Inc (NASDAQ:QTT) which was down 23.50% to 3.32 in late trade, Celsion Corp (NASDAQ:CLSN) which lost 21.26% to settle at 1.370 and Broadwind Energy Inc (NASDAQ:BWEN) which was down 14.59% to 8.960 at the close.
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1639 to 1441 and 90 ended unchanged; on the Nasdaq Stock Exchange, 1694 rose and 1351 declined, while 77 ended unchanged.
Shares in SVB Financial Group (NASDAQ:SIVB) rose to all time highs; up 4.63% or 21.08 to 476.67. Shares in Apple Inc (NASDAQ:AAPL) rose to all time highs; up 1.64% or 2.25 to 139.12. Shares in AzurRx BioPharma Inc (NASDAQ:AZRX) rose to 52-week highs; rising 57.26% or 0.710 to 1.950. Shares in Adamis Pharma (NASDAQ:ADMP) rose to 52-week highs; rising 43.31% or 0.5500 to 1.8200.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 0.61% to 21.45.
Gold Futures for February delivery was down 0.55% or 10.25 to $1855.65 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March fell 1.86% or 0.99 to hit $52.14 a barrel, while the March Brent oil contract fell 1.46% or 0.82 to trade at $55.28 a barrel.
EUR/USD was up 0.06% to 1.2169, while USD/JPY rose 0.33% to 103.83.
The US Dollar Index Futures was up 0.09% at 90.207.
The dollar is set to snap a two-week winning streak on Friday, but will likely find support over the next few months before resuming its trend lower, experts said.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.09% to 90.21.
The weekly slip in the dollar comes ahead of a busy week, with inflation, economic data and the Federal Reserve on the economic calendar.
Commerzbank (DE:CBKG) said in a note:
The Federal Open Market Committee is likely to provide a more optimistic outlook on the economy in the wake of fiscal stimulus that it has deemed as critical to the recovery.
“A much more positive assessment of the economic outlook by the committee would likely give a boost to U.S. yields and thus also to the U.S. dollar.”
The economy meanwhile is expected to show strong growth for the fourth quarter, further fueling hopes “for a quick recovery and support the dollar,” the bank added.
But looking ahead, the dollar is likely to reverse course and trend lower, as its boost from rising bond yields is transitory, with upside in rates expected to be capped by a prolonged period of ultra-loose monetary policy conditions.
The 10-2 Year Treasury Yield Spread curve – the difference between the 10-year treasury rate and the 2-year treasury rate – that serves as a gauge of the health of the economy has been steepening, pointing to growing optimism over the recovery. Commerzbank said:
“Once yields have stabilized, the U.S. dollar is also likely to run out of steam. Instead, the focus is likely to turn to longer-term risks, which is why we continue to expect EUR-USD trade at higher levels by the end of the year.”
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The “ka-ching!” hasn’t sounded yet at the U.S. stimulus register for gold. But that didn’t stop longs in yellow metal from booking their first weekly gain since Christmas – although Friday’s volatility likely left them with a smaller profit than expected.
As regular trading on New York’s Comex officially timed out at 1:30 PM ET (18:30 GMT), February gold settled down $9.70, or 0.5%, at 1,856.20. But Friday to Friday, the benchmark gold futures contract was up $26.30, or 1.4%. In the prior two weeks, February gold lost nearly 3.5% combined.
More than the net weekly gain would have been the windfall for the longs who doubled down at the weekend’s low of just under $1,804 for gold. The haven collapsed in the last fortnight, pressured by a surprise hike in U.S. bond yields and – an even weirder – rally in the dollar, despite the currency’s pending debasement in the trillions from the Biden administration’s proposed Covid-19 relief spending.
At the time of writing, yields tied to the benchmark U.S. 10-year bond note dropped 1.5% on the day but rose 0.3% on the week. The Dollar Index, pit against six other major currencies, was up 0.1% on the day but down 0.6% on the week.
Eric Scoles, market strategist at Blueline Futures in Chicago, said:
“I think gold is building up energy and likely to make a solid move in the near to intermediate future.”
Which direction, he’s unsure. And this is Scoles’ problem, as well as that of many analysts.
President Joe Biden’s first proposed Covid-19 relief package of $1.9 trillion itself is massive and should do wonders for gold’s proposition as a hedge against dollar debasement. And the president might need a lot more than that to fight the pandemic, given expectations that the U.S. fiscal deficit – now at below $5 trillion – could reach double-digits under his watch.
Treasury Secretary Janet Yellen, at her Senate confirmation hearing this week, also said the White House intended to go “big” on deficit spending to stimulate the economy, and that the benefits of recovery outweigh the costs.
The problem for the administration though is the razor-thin majority of one held by Democrats aligned with Biden in the new U.S. Senate.
Since stimulus measures are an integral part of the U.S. budget, without a super-majority of 67 out of the 100 seats in Senate, they run into a process called “reconciliation” that can only be overridden by a minimum of 60 votes (Democrats and Republicans both have 50 seats in the Senate now, with Vice President Kamala Harris having an additional vote to break the tie).
This reconciliation bit has led to concerns that large stimulus efforts by Biden won’t easily pass muster with the Senate, especially with Republican fiscal hawk Mitch McConnell returning as Minority Leader to make legislation in the upper chamber of Congress as trying for the Democrats as it was when he presided as Majority Leader.
The compromise though would be a string of mid-sized stimulus packages, rather than chunky trillion-dollar installments.
That could mean a slower climb for gold prices rather than a runaway rally many had thought earlier.
Scoles pointed to gold’s hourly chart that showed a mostly range-bound move between $1,826 and $1,827 since Jan 8. This suggested a market in consolidation before a bigger next move, he said. Scoles added:
“In my opinion, the daily chart and the monthly chart both look a bit bearish. There is however a notable bullish signal on the weekly chart showing a positive reversal. But I’m somewhat bearish until there is a more significant shift in fundamentals.”
Ed Moya, senior analyst at OANDA in New York, concurred with that view:
“Bets against the greenback remain excessive and the dollar rebound might need to continue before dollar weakness can resume. Gold appears set to consolidate, but the longer-term bullish outlook should remain intact on ballooning deficits and as inflationary pressures heat up.”
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Oil prices fell their most in a week after the first U.S. crude build in six weeks reported by the government on Friday that corresponded with the lack of fuel demand amid the coronavirus pandemic.
New York-traded West Texas Intermediate, the key indicator for U.S. crude, settled down 86 cents, or 1.6%, at $52.27 per barrel. It was WTI’s sharpest one-day slide since last Friday when it fell 2.2%. But for the week itself, the U.S. crude contract lost about 0.2%.
London-traded Brent, the global benchmark for crude, settled down 78 cents, or 1.4%, at $56.10.
The build in crude stockpiles coincided with President Joe Biden’s message on Thursday calling on Americans to brace for “dark days” ahead from the Covid-19, which could kill up to 500,000 people in the country by the week ended Feb. 13, raising the current death toll of 412,000.
“President’s words matter,” Phil Flynn, energy analyst at the Price Futures Group brokerage in Chicago, wrote in his Friday commentary, noting that there was no certainty either that Biden would be able to push through quickly a stimulus spending bill of nearly $2 trillion to fight the pandemic.
Stimulus spending, aimed at economic recovery, typically boosts markets, and oil had joined other commodities and stocks in rallying earlier this week on Biden’s proposal.
Yet, the problem for the Biden administration is the razor-thin majority of one held by Democrats aligned with the president in the new U.S. Senate.
Since stimulus measures are an integral part of the U.S. budget, without a super-majority of 67 out of the 100 seats in Senate, they run into a process called “reconciliation” that can only be overridden by a minimum of 60 votes (Democrats and Republicans both have 50 seats in the Senate now, with incoming Vice President Kamala Harrris having an additional vote to break the tie).
This reconciliation bit has led to concerns that large stimulus efforts by Biden won’t easily pass muster with the Senate, especially with Republican fiscal hawk Mitch McConnell returning as Minority Leader to make legislation in the upper chamber of Congress as trying for the Democrats as it was when he presided as Majority Leader.
On the crude inventory front, the Energy Information Administration reported a build of 4.35 million barrels for the week ended Jan. 15. It was the first stockpile increase for U.S. crude since the week to Dec. 7 and bucked market expectations for a draw of 1.17 million barrels.
Contributing to the crude build here is a huge slump in U.S. crude exports, which fell by nearly 750,000 bpd, or barrels per day. But to offset some of the slack in exports, the United States also took in less imports last week, to the measure of 194,000 bpd, the EIA data showed.
On the fuel products front, gasoline registered a draw of just over a quarter million barrels versus an expected build of 2.8 million. That came after a total build of 9 million barrels over the previous two weeks.
For diesel-led distillates, the build was less than half a million barrels versus expectations of a rise of 1.2 million. Distillate inventories have risen 14.5 million barrels over four weeks now.
Besides the U.S., the outlook for oil was getting worrying on the international front as well, with Iran officials reporting on Friday that they were ramping up production with the end of tight policing done on the regime by the previous Trump administration’s sanctions.
Iran once sent out more than 3 million barrels per day around the world, and although its crude shipments were at a fraction of that now, it could regain its export momentum for oil very quickly. It is something to be watched carefully, given the impact Iran could have on the stage-managed output of the global oil alliance OPEC+, and the broader impact on oil prices.
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The U.S. Energy Information Administration reported on Friday that domestic supplies of natural gas declined by 187 billion cubic feet for the week ended Jan. 15. On average, the data, which came out a day later than usual because of Wednesday’s U.S. presidential inauguration, were expected to show a drop of 177 billion cubic feet for the week, according to analysts polled by S&P Global Platts. Total stocks now stand at 3.009 trillion cubic feet, up 36 billion cubic feet from a year ago, and 198 billion cubic feet above the five-year average, the government said. Following the data, February natural gas NGG21, -1.57% was down 3.3 cents, or 1.3%, to $2.458 per million British thermal units. It traded at $2.464 shortly before the data.
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About the Author
Myra P. Saefong, assistant global markets editor, has covered the commodities sector for MarketWatch for 20 years. She has spent the bulk of her years at the company writing the daily Futures Movers and Metals Stocks columns and has been writing the weekly Commodities Corner column since 2005.
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