Written by Investing.com Staff, Investing.com
U.S. stocks lower at close of trade; Dow Jones Industrial Average down 1.39%
U.S. stocks were lower after the close on Friday, as losses in the Oil & Gas, Consumer Goods and Basic Materials sectors led shares lower.
At the close in NYSE, the Dow Jones Industrial Average fell 1.39% to hit a new 1-month low, while the S&P 500 index lost 1.32%, and the NASDAQ Composite index lost 1.38%.
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The best performers of the session on the Dow Jones Industrial Average were McDonald’s Corporation (NYSE:MCD), which rose 1.10% or 2.27 points to trade at 209.09 at the close. Meanwhile, Nike Inc (NYSE:NKE) added 0.10% or 0.13 points to end at 134.85 and Salesforce.com Inc (NYSE:CRM) was up 0.01% or 0.02 points to 226.52 in late trade.
The worst performers of the session were 3M Company (NYSE:MMM), which fell 3.50% or 6.42 points to trade at 177.00 at the close. Chevron Corp (NYSE:CVX) declined 3.67% or 3.27 points to end at 85.75 and Dow Inc (NYSE:DOW) was down 3.44% or 1.87 points to 52.51.
The top performers on the S&P 500 were Nektar Therapeutics (NASDAQ:NKTR) which rose 8.46% to 20.00, Skyworks Solutions Inc (NASDAQ:SWKS) which was up 6.89% to settle at 170.80 and Western Digital Corporation (NASDAQ:WDC) which gained 6.53% to close at 56.09.
The worst performers were Macerich Company (NYSE:MAC) which was down 14.89% to 16.18 in late trade, ResMed Inc (NYSE:RMD) which lost 7.23% to settle at 200.31 and Principal Financial Group Inc (NASDAQ:PFG) which was down 6.83% to 48.96 at the close.
The top performers on the NASDAQ Composite were Siebert Financial Corp (NASDAQ:SIEB) which rose 131.81% to 8.60, Iconix Brand Group Inc (NASDAQ:ICON) which was up 90.36% to settle at 3.160 and Koss Corporation (NASDAQ:KOSS) which gained 66.83% to close at 70.000.
The worst performers were Marine Petroleum Trust (NASDAQ:MARPS) which was down 41.43% to 5.260 in late trade, eHealth Inc (NASDAQ:EHTH) which lost 38.47% to settle at 48.12 and Ucommune International Ltd (NASDAQ:UK) which was down 33.60% to 3.38 at the close.
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 2303 to 791 and 75 ended unchanged; on the Nasdaq Stock Exchange, 2121 fell and 970 advanced, while 55 ended unchanged.
Shares in Skyworks Solutions Inc (NASDAQ:SWKS) rose to all time highs; gaining 6.89% or 11.01 to 170.80. Shares in Iconix Brand Group Inc (NASDAQ:ICON) rose to 52-week highs; up 90.36% or 1.500 to 3.160. Shares in eHealth Inc (NASDAQ:EHTH) fell to 52-week lows; falling 38.47% or 30.08 to 48.12. Shares in Koss Corporation (NASDAQ:KOSS) rose to all time highs; gaining 66.83% or 28.040 to 70.000. Shares in Ucommune International Ltd (NASDAQ:UK) fell to all time lows; down 33.60% or 1.71 to 3.38.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 1.72% to 30.73.
Gold Futures for April delivery was up 0.46% or 8.40 to $1849.60 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March unchanged 0.00% or 0.00 to hit $52.34 a barrel, while the April Brent oil contract rose 0.04% or 0.02 to trade at $55.12 a barrel.
EUR/USD was up 0.12% to 1.2136, while USD/JPY rose 0.49% to 104.72.
The US Dollar Index Futures was up 0.11% at 90.528.
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The dollar pushed higher in early European trading Friday, with the safe haven in demand as risk sentiment takes a hit on the back of turmoil in equity markets.
At 3:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was up 0.3% at 90.690, adding on to Wednesday’s 0.6% gain.
USD/JPY rose 0.3% at 104.50, GBP/USD fell 0.1% to 1.3708, EUR/USD fell 0.2% to $1.2102, while the risk-sensitive AUD/USD dropped 0.3% at 0.7656.
U.S. stock futures moved sharply lower in early morning trading on Friday, with Wall Street’s main equity indices on course for their worst week since the end of October. Hedge funds have been forced to liquidate positions to generate funds after their short positions in a number of stocks ran into a wave of buying from retail traders.
This volatility in the equity markets has prompted safe-harbor demand for the U.S. currency.
Also helping the greenback was the release of some positive U.S. economic data on Thursday, with the weekly initial jobless claims falling more than expected. Fourth-quarter GDP, meanwhile, slowed sharply but stayed positive, growing at annualized rate of 4.0%.
ING analyst Carsten Brzeski said in a research note:
“The economy will likely continue struggling for the next month or two, but with vaccinations accelerating and households looking cash rich, a reopening of the economy could see growth reach multi-decade highs.”
By contrast, the euro-zone economy is likely to shrink again in the first quarter given the stringent lockdowns while the vaccination campaign is hardly pulling up trees.
The French economy lurched back into contraction in the final quarter of last year, shrinking 1.3% in the final three months of last year after surging 18.5% in the previous quarter, when it staged a strong rebound following a first lockdown. Austria‘s fell 4.3% as the start of winter tourism season fell flat. However, Spain‘s GDP defied expectations for a fall by growing 0.4%.
Brzeski added:
“Our bearish dollar view for 2021 has been built firstly on the Federal Reserve keeping policy very loose and secondly on the synchronised global recovery providing attractive alternatives outside of the US. Both premises are coming into question.”
Investors are also awaiting news of U.S. President Joe Biden’s fiscal spending package, with the delay in its approval suggesting that the proposed $1.9 trillion deal will not end up being as large as expected, meaning less borrowing for the dollar to cope with.
See also:
After a week trending downwards, gold was up Friday morning in Asia as investors waited for news from the U.S. on a $1.9 trillion stimulus package proposed by President Joe Biden.
Gold futures were up by 0.15% at $1,844.00 by 09:53 PM ET (02:53 AM GMT).
The moves in gold followed news overnight that U.S. GDP contracted 3.5% for all of 2020, the worst contraction since 1946, after the Second World War.
Despite the performance of the U.S. economy in 2020 and the impact of the pandemic across the globe, demand for gold fell to its lowest since 2009, according to the World Gold Council:
“The coronavirus pandemic, with its far-reaching effects, was the driving factor behind weakness in consumer demand throughout 2020, culminating in a 14% decline in annual demand to 3,759.6t, the first sub-4,000t year since 2009.”
The U.S. rescue package could put pressure on gold prices even by helping shore up economic growth. Brian Deese, economic advisor to the White House, said on Thursday.
“Without swift action, we risk a continued economic crisis that will make it harder for Americans to return to work and get back on their feet.”
Gold Investors will be on the lookout for clues on the movement of the package and other economic measures to curb the impact of COVID-19.
The International Monetary Fund (IMF) said on Thursday that fiscal spending was needed to limit the economic impact of the pandemic. Gita Gopinath, economic counselor, and director of the research department at IMF, said:
“Because of this crisis, fiscal spending was needed. That increase in fiscal spending alongside the output collapse has raised debt levels to record highs in many countries. The fact that we have low interest rates and because we have growth now coming back in 2021, that should help stabilize debt levels in many countries. But it is very important for all countries to have medium-term fiscal frameworks that ensure that debt remains sustainable.”
See also:
- Gold Down as Investors Turn to Dollar (Wednesday)
Crude oil prices settled lower Friday for the second straight week on fears the rocky ride for demand will continue as the threat of new Covid-19 variants prolonging the pandemic remans.
On the New York Mercantile Exchange crude futures for March delivery fell 14 cents to settle at $52.20 a barrel, while on London’s Intercontinental Exchange (NYSE:ICE), Brent gained 35 cents to settle at $58.88 a barrel.
Mixed news on the vaccine raised the concerns about the new strains of Covid-19 delaying the economic reopening.
Novavax Inc (NASDAQ:NVAX)released data showing its Covid-19 vaccine was 89.3% effective, while Johnson & Johnson’s (NYSE:JNJ) one-dose vaccine was 66% effective worldwide.
Johnson & Johnson’s trials, however, included newly emerging coronavirus strains from South Africa and the U.K.
But analyst remained adamant that JNJ’s vaccine will play role in helping the economy return to normal.
Despite having a lower efficacy than established mRNA vaccines from Pfizer (NYSE:PFE) and Moderna Inc (NASDAQ:MRNA), JNJ’s vaccine was shown to be 85% effective in preventing severe disease and hospitalizations/death, which, are “two primary drivers of the lockdowns/restrictions,” BofA said in a note.
Top U.S. infectious disease specialist Anthony Fauci said the Johnson & Johnson’s vaccine news was “very encouraging” in controlling Covid-19, though he added that the highly transmissible variants were a “wake up call” for the public.
The weak end to the day for oil prices, however, has done little to sway Wall Street conviction in the “bull thesis” for energy in the wake of the Saudi Arabia’s production cuts. Commerzbank (DE:CBKG) said:
“Thanks to Saudi Arabia’s voluntary production cut (and high prices), there should be little need of talk at next week’s OPEC+ meeting. The oil price should therefore remain stable.”
See also:
Natural Gas (Hellenic Shipping News)
US working natural gas stocks dipped less than the market expected last week, leading to a dip in the Henry Hub prompt month, but a cold spell seizing most of the nation could lead to the largest draw of the heating season thus far for the week in progress.
Storage inventories decreased by 128 Bcf to 2.881 Tcf for the week-ended Jan. 22 the US Energy Information Administration reported Jan. 28. It was a sharp departure from the massive 187 Bcf draw reported the week prior.
US supply and demand balances were much looser than the week prior. The call on storage fields fell by 6.4 Bcf/d week over week, according to S&P Global Platts Analytics. Total demand saw a large decline due to milder temperatures, which pushed residential and commercial and industrial combined demand down nearly 2.9 Bcf/d.
In addition, gas-fired power generation fell by 3.3 Bcf/d. This was due in part to higher wind and coal generation. Gas supply remained relatively stable as 300 MMcf/d of growth in US production was offset by an almost equal decline in net Canadian imports. Colder weather in Canada led to a spike in local demand resulting in less export to the Lower 48.
The withdrawal was weaker than an S&P Global Platts’ survey of analysts calling for a 136 Bcf draw. The pull also trailed the 170 Bcf draw reported during the same week last year as well as the five-year average withdrawal of 174 Bcf, according to EIA data.
Storage volumes now stand 78 Bcf, or 3%, more than the year-ago level of 2.803 Tcf and 244 Bcf, or 9%, more than the five-year average of 2.637 Tcf.
The NYMEX Henry Hub March contract slipped 2 cents to $2.68/MMBtu on Jan. 28. Despite the slight dip, the prompt-month contract stands 14 cents higher than one week prior as frigid temperatures have gripped much of the nation during the week in progress, leading to the highest demand of the heating season thus far in multiple storage regions.
Platts Analytics’ forecasts a 198 Bcf withdrawal for the week ending Jan. 29 as a cold-weather pattern moves east across the US, dragging down temperatures in the Northeast and Southeast, likely driving demand to a year-to-date high. Average temperatures plummeted Jan. 28 in the Northeast and Southeast cell by 7.5 degrees Fahrenheit and 11.5 degrees, respectively.
It also remains cold across the Midwest, prompting production freeze-offs, particularly in the Bakken Shale. Across the Eastern US, demand has risen by a combined 8 Bcf on the day.
Source: Platts
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