Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 1.85%
U.S. stocks were higher after the close on Friday, as gains in the Oil & Gas, Telecoms and Basic Materials sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average rose 1.85%, while the S&P 500 index added 1.95%, and the NASDAQ Composite index gained 1.55%.
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The best performers of the session on the Dow Jones Industrial Average were Chevron Corp (NYSE:CVX), which rose 4.31% or 4.50 points to trade at 109.00 at the close. Meanwhile, Intel Corporation (NASDAQ:INTC) added 4.13% or 2.41 points to end at 60.74 and UnitedHealth Group Incorporated (NYSE:UNH) was up 3.98% or 13.29 points to 347.10 in late trade.
The worst performers of the session were Boeing Co (NYSE:BA), which fell 0.66% or 1.49 points to trade at 223.22 at the close. Goldman Sachs Group Inc (NYSE:GS) declined 0.58% or 1.92 points to end at 327.37 and JPMorgan Chase & Co (NYSE:JPM) was up 0.23% or 0.35 points to 150.91.
The top performers on the S&P 500 were Helmerich and Payne Inc (NYSE:HP) which rose 12.56% to 32.44, Nov Inc (NYSE:NOV) which was up 12.13% to settle at 17.29 and Apache Corporation (NASDAQ:APA) which gained 10.82% to close at 23.25.
The worst performers were Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) which was down 12.31% to 28.85 in late trade, Royal Caribbean Cruises Ltd (NYSE:RCL) which lost 5.57% to settle at 86.51 and Carnival Corporation (NYSE:CCL) which was down 4.78% to 26.09 at the close.
The top performers on the NASDAQ Composite were Second Sight Medical Products (NASDAQ:EYES) which rose 304.90% to 5.79, Sify Technologies Limited (NASDAQ:SIFY) which was up 45.93% to settle at 3.940 and XTL Biopharmaceuticals Ltd ADR (NASDAQ:XTLB) which gained 29.76% to close at 3.750.
The worst performers were Super League Gaming Inc (NASDAQ:SLGG) which was down 33.11% to 5.90 in late trade, Evofem Biosciences Inc (NASDAQ:EVFM) which lost 30.28% to settle at 2.28 and Capital Franchising Inc (NASDAQ:FORA) which was down 25.88% to 11.5700 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2439 to 763 and 85 ended unchanged; on the Nasdaq Stock Exchange, 2244 rose and 1092 declined, while 62 ended unchanged.
Shares in Helmerich and Payne Inc (NYSE:HP) rose to 52-week highs; up 12.56% or 3.62 to 32.44. Shares in Chevron Corp (NYSE:CVX) rose to 52-week highs; rising 4.31% or 4.50 to 109.00. Shares in Second Sight Medical Products (NASDAQ:EYES) rose to 52-week highs; up 304.90% or 4.36 to 5.79.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 13.69% to 24.66.
Gold Futures for April delivery was down 0.16% or 2.70 to $1698.00 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in April rose 3.81% or 2.43 to hit $66.26 a barrel, while the May Brent oil contract rose 4.20% or 2.80 to trade at $69.54 a barrel.
EUR/USD was down 0.40% to 1.1918, while USD/JPY rose 0.38% to 108.38.
The US Dollar Index Futures was up 0.41% at 92.018.
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The dollar is set for a second weekly gain after rallying on Friday, on strong labor market data, but economists suggest the greenback’s resurgence will be limited as low inflation will persist.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.35% to 91.96.
The U.S. economy created 379,000 jobs last month, well above economists’ consensus forecast of 182,000, with the unemployment rate falling to 6.2% from 6.3%, underpinned by easing Covid-19 restrictions and a ramp-up in vaccine distribution.
But a rapidly improving labor market, however, doesn’t necessarily translate into stronger inflation, which will likely keep the Fed on pause, stifling the dollar’s momentum.
“The USD appreciation potential remains limited for the time being […] as it is inflation that will determine when the US Federal Reserve will consider raising interest rates,” Commerzbank (DE:CBKG) said. “[It] is likely to be a long time before the Fed is satisfied with the inflation trend, which is why we do not forecast any interest rate hikes within our forecast horizon (i.e. until the end of 2022) and thus also no USD appreciation trend.”
Commerzbank’s remarks echoed that of the Fed chairman Jerome Powell who downplayed the risk of a sustained uptick in inflation, and reiterated that current monetary policy measures are appropriate.
“There’s good reason to think we’ll begin to make more progress. But even if it happens, it’s likely to take some time to achieve substantial further progress, or interest rates to raise interest rates above zero,” Powell said on Thursday.
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Gold continued to seek meaningful support on Friday, posting a third straight weekly loss as it struggled to recover from a collapse to $1,600 levels triggered by a spike in U.S. bond yields and the dollar.
Gold for April delivery on New York’s Comex settled up $1.10, or less than 0.1%, at $1,701.80 an ounce. For the week though, it fell 1.5%, extending last week’s decline of 2.7% and the previous week’s drop of 2.5%. In Friday’s session, it fell to as low as $1,684.05 – the lowest price since April 2020 for a benchmark gold futures.
“It is possible we will see gold reach above $1,700 again in the near future but if it does, it will likely be brief and I would consider it a selling opportunity,” said Eric Scoles, analyst at Chicago’s Blueline Futures.
“This market is on track to keep going down and I expect to see it below 1600 with potential to drop further from there. Big picture: 2020 gave us one of the most bullish possible situations for gold but that is ending. We are recovering and money is going to move into assets where it will grow and gold prices will suffer.”
Spot gold, which reflects real-time trades in bullion, was up $1.53, or 0.1%, at $1,698.86, after a bottom $1,687.45 – its lowest since June 2020. Hedge funds and other money managers sometimes rely more on the spot price than futures for determining direction in gold.
Gold’s tumble this week was driven by the same phenomenon of the past two weeks – surging bond yields and the dollar
Yields and the greenback soared anew this week after Federal Reserve Chairman Jerome Powell said the central bank was unlikely to step up bond buying to tame fears of a sudden inflation spike from an U.S. economy increasingly becoming unshackled from the Covid-19 pandemic.
While gold itself has been touted and used as a hedge against inflation for decades, that quality has been played down for months by markets. The yellow metal has fallen from grace since August, when it hit record highs of nearly $2,090. Losses in gold have accelerated since the November breakthroughs in Covid-19 vaccines.
Traders had expected gold to see another meltdown on Friday after the Labor Department reported a growth of 379,000 jobs for February in a pandemic-suppressed market.
While that number was way above the 182,000 jobs growth forecast by economists, it also came on the back of a flat trendline for unemployment, which stayed at 6.2 percentage points.
That spared gold from another licking.
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Crude oil prices surged Friday, climbing to fresh one-year highs, after a group of top producers agreed not to increase supply in April, taking a cautious stance on the global economic recovery.
By 10 AM ET (1500 GMT), U.S. crude futures traded 3% higher at $65.77 a barrel, rising above $65 for the first time since January 2020, while the international benchmark Brent contract rose 3.2% to $68.90, also at its highest level since the start of last year.
U.S. Gasoline RBOB Futures were up 2.5% at $2.0484 a gallon, the first time above $2 since January 2019.
These gains followed the decision of the Organization of Petroleum Exporting Countries and its allies including Russia, a grouping known as OPEC+, to extend its output curbs into April, only granting small exemptions to Russia and Kazakhstan.
This move surprised a number of traders, particularly with Saudi Arabia agreeing to maintain its voluntary additional cut of 1 million barrels per day through April even after oil prices had rallied to over $60 a barrel from below $40, when it decided on the need to reduce global supply.
Analysts at influential investment bank Goldman Sachs (NYSE:GS) responded to this decision by lifting its second-quarter and third-quarter forecasts for Brent by $5 each to $75 and $80 a barrel, respectively.
“Although members discussed Covid demand risks, our takeaway from the press conference is that the discipline of shale producers is likely behind this slower increase in production,” the bank said in a note.
The OPEC+ members appear to believe that U.S. oil production will struggle to respond to the higher price environment in the near term, particularly after the damage caused by the recent wintry snap.
“If this is the attitude that OPEC+ are taking it does suggest that they believe they can push prices even higher, without the risk of losing market share,” said analysts at ING, in a research note. “And would not be surprised to see Brent testing US$70/bbl ahead of the next OPEC+ meeting” at the start of April.
Ahead of that, focus will turn to the Baker Hughes’ rig count data later Friday. The number of active rigs has picked up somewhat in recent months but remains nowhere near the level analysts say is necessary to generate a meaningful rise in output.
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Natural Gas (Hellenic Shipping News)
Significant demand for natural gas in mid-February led to the second-largest reported withdrawal of natural gas from storage in the United States, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). Weekly stocks fell by 338 billion cubic feet (Bcf) in the week ending February 19, 2021, nearly three times the average withdrawal for mid-February. A record amount of natural gas, 156 Bcf, was withdrawn during that week in the South Central region, which includes Texas.
Colder-than-normal temperatures across much of the Lower 48 states, especially in Texas, led to increased demand for space heating. Population-weighted heating degree days (HDDs) represent temperature deviations lower than 65 degrees Fahrenheit and are weighted based on population distributions across the country. For the week ending February 19, U.S. HDDs reached 254, or nearly 40% colder than normal, according to the National Oceanic and Atmospheric Administration.
Source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report
In Texas, the two most common space heating fuels are electricity (the primary heating fuel in more than 60% of Texas homes, according to Census data) and natural gas (36%). Increases in electricity demand also affect natural gas demand because natural gas is the most prevalent electricity generation source in Texas and in much of the South.
Source: U.S. Energy Information Administration, Weekly Natural Gas Storage Report and heating degree days from National Oceanic and Atmospheric Administration, Climate Prediction Center
Estimated U.S. natural gas demand on February 14, 2021, reached 148.3 Bcf, surpassing the previous single-day record set in January 2019, according to estimates from IHS Markit. In addition, during the week ending February 19, U.S. average weekly dry natural gas production fell by 13.8 billion cubic feet per day (Bcf/d), according to estimates from IHS Markit. The decline in natural gas production was primarily because of freeze-offs, which occur when water and other liquids freeze at the wellhead or in natural gas gathering lines near production activities. Dry natural gas production fell by an estimated 10 Bcf/d in Texas alone, according to IHS Markit estimates.
Source: EIA
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