Written by Investing.com Staff, Investing.com
U.S. stocks higher at close of trade; Dow Jones Industrial Average up 1.06%
U.S. stocks were higher after the close on Friday, as gains in the Oil & Gas, Technology and Consumer Services sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average gained 1.06%, while the S&P 500 index climbed 1.49%, and the NASDAQ Composite index gained 2.32%.
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The best performers of the session on the Dow Jones Industrial Average were Goldman Sachs Group Inc (NYSE:GS), which rose 2.77% or 9.94 points to trade at 368.75 at the close. Meanwhile, Salesforce.com Inc (NYSE:CRM) added 2.74% or 5.79 points to end at 217.66 and Boeing Co (NYSE:BA) was up 2.60% or 5.79 points to 228.43 in late trade.
The worst performers of the session were Walt Disney Company (NYSE:DIS), which fell 2.59% or 4.62 points to trade at 173.72 at the close. Merck & Company Inc (NYSE:MRK) declined 0.55% or 0.43 points to end at 78.26 and Home Depot Inc (NYSE:HD) was down 0.49% or 1.58 points to 323.84.
The top performers on the S&P 500 were Macy’s Inc (NYSE:M) which rose 14.00% to 18.08, Seagate Technology PLC (NASDAQ:STX) which was up 12.42% to settle at 97.95 and Nordstrom Inc (NYSE:JWN) which gained 11.22% to close at 40.94.
The worst performers were Fox Corp Class A (NASDAQ:FOXA) which was down 3.82% to 37.26 in late trade, Walt Disney Company (NYSE:DIS) which lost 2.59% to settle at 173.72 and Fox Corp Class B (NASDAQ:FOX) which was down 2.21% to 36.25 at the close.
The top performers on the NASDAQ Composite were MoSys Inc (NASDAQ:MOSY) which rose 51.21% to 4.370, HyreCar Inc (NASDAQ:HYRE) which was up 45.13% to settle at 12.96 and LifeMD Inc (NASDAQ:LFMD) which gained 35.02% to close at 8.79.
The worst performers were Solid Biosciences LLC (NASDAQ:SLDB) which was down 21.85% to 3.47 in late trade, Evolving Systems Inc (NASDAQ:EVOL) which lost 21.40% to settle at 1.8000 and Polarityte Inc (NASDAQ:PTE) which was down 21.19% to 0.98 at the close.
Rising stocks outnumbered declining ones on the New York Stock Exchange by 2656 to 556 and 94 ended unchanged; on the Nasdaq Stock Exchange, 2804 rose and 581 declined, while 88 ended unchanged.
Shares in Seagate Technology PLC (NASDAQ:STX) rose to all time highs; rising 12.42% or 10.82 to 97.95.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 18.68% to 18.81.
Gold Futures for June delivery was up 1.04% or 18.95 to $1842.95 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in June rose 2.48% or 1.58 to hit $65.40 a barrel, while the July Brent oil contract rose 2.51% or 1.68 to trade at $68.73 a barrel.
EUR/USD was up 0.53% to 1.2143, while USD/JPY fell 0.09% to 109.36.
The US Dollar Index Futures was down 0.46% at 90.317.
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- India stocks mixed at close of trade; Nifty 50 down 0.13%
- Japan stocks higher at close of trade; Nikkei 225 up 2.32%
Australia stocks higher at close of trade; S&P/ASX 200 up 0.45%
The dollar edged lower in early European trade Friday, taking a breather after the week’s gains, as traders digest the latest inflation data and the potential impact on Federal Reserve policy.
At 3:05 AM ET (0805 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.2% at 90.532, but still around 0.5% higher so far this week.
EUR/USD traded 0.3% higher at 1.2109, GBP/USD was up 0.1% at 1.4068, and USD/JPY was down 0.1% at 109.39. Additionally, AUD/USD rose 0.2% to 0.7744, while NZD/USD rose 0.3% to 0.7192.
Thursday saw the release of factory gate price data in the U.S., with the producer price index rising 0.6% in April after surging 1.0% in March. The annual figure shot up 6.2%, the biggest year-on-year rise since the series was revamped in 2010 and followed a 4.2% jump in March.
This strong data adds to Wednesday’s stunning jump in consumer prices, suggesting inflationary pressure is building up in the United States as vaccine rollouts prompt a reopening of an economy bursting at the seams with stimulus.
That said, Federal Reserve officials have been at pains to point out that they had expected a spike in inflation and that it would prove to be temporary, the latest being Fed Governor Christopher Waller.
“The factors putting upward pressure on inflation are temporary, and an accommodative monetary policy continues to have an important role to play in supporting the recovery,” Waller told a virtual event Thursday. “We will not overreact to temporary overshoots of inflation.”
Benchmark 10-Year U.S. Treasury yields failed to rise to any great degree after the PPI data, and now trade around 1.65%.
“Although we are likely to see blockbuster growth in the second half of the year, economic growth will likely slow next year, to strong but less impressive growth rates,” said analysts at ABN Amro, in a note. “Overall, we do not expect sustained high inflation over the coming years, but it is certainly the risk to watch.”
For today, the focus will be on U.S. retail sales for April, which should remain strong after the impressive 9.7% rise in March, as well as industrial production numbers and consumer sentiment for May.
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Gold longs are still waiting at the $1,850 altar, but their search for suitors at that level ended in vain for a second week in a row.
That, however, did not stop believers in the yellow metal from posting a 0.8% at Friday’s close and a 0.3% rise on the week. It was, in fact, a second straight positive week for gold after last week’s 3.3% rally that proved its best since the final week of October.
Benchmark gold futures on New York’s Comex settled at $1,838.10, up $14.10 on the day and $6.15 on the week.
The spot price of gold was at $1,842.87 by 3:41 PM ET (19:41).
Traders and fund managers sometimes decide on the direction for gold by looking at the spot price – which reflects bullion for prompt delivery – instead of the futures.
Gold longs have had an interesting couple of weeks after arguments about runaway inflation in the U.S. were reignited by a raft of data on consumer and producer prices, industrial production and consumer sentiment.
The U.S. Consumer Price Index grew by 4.2% in the 12 months to April for its largest increase in almost 13 years, while the Producer Price Index expanded by 6.2% last month over a one-year period for its biggest expansion in a decade.
US industrial production rose 0.7 percent in April, slowing by a third from March as carmakers idled some plants after a shortage in auto circuitry microchips although a spike in mining still boosted activity, the Federal Reserve reported.
An early reading of U.S. consumer confidence in May showed a drop as Americans worried about inflation and its impact on their income, the University of Michigan said in a survey closely followed by the country’s economists.
U.S. retail sales, meanwhile, turned flat in April after a jump of nearly 11% in March, according to data from the Commerce Department that took some heat off inflationary expectations in an economy rapidly recovering from the coronavirus pandemic.
The Federal Reserve acknowledges price pressures arising from bottlenecks in supply chains struggling to cope with demand in an economy reopening after months of pandemic-suppression.
But the central bank insists that these inflationary pressures are “transitory” and will fade as the economy makes a full recovery. It also says it does not see the need for now to raise interest rates.
“The data over the past couple of weeks will not trigger a change in the Fed’s ultra-accommodative stance,” said Ed Moya, analyst at online trading platform OANDA. “The next few months will show higher inflation forecasts, but that should start to trend lower once the base effects kick in.”
“Gold’s next challenge remains recapturing the $1,855 level, which could open the floodgates for momentum traders.”
Logically, gold should have rallied on the ramping inflation signal given its long-standing role as a store of value and hedge against rising costs.
But in markets ruled by distorted expectations and hype, there is little room for logic.
So, the Dollar Index and 10-year Treasury note have rallied intermittently with gold this week, hampering the yellow metal’s chance of a breakout that could propel it nearer to the $1,900 level that could set the stage for a return of August highs above $2,000.
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It’s been a volatile week for oil as the Colonial Pipeline saga and the associated boom-bust-boom in gasoline from that played against the backdrop of India’s festering Covid situation.
With Friday’s settlement, the bulls in crude could heave a sigh of relief: It was another winning week. In fact, the third in a row.
New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled at $65.37, up $1.55, or 2.4%. The rally helped offset a chunk of Thursday’s 3.4% drop – which was WTI’s worst one-day decline since April 5.
For the week, the U.S. crude benchmark gained 0.7%, adding to last week’s 2.1% advance and the prior week’s 2.3% rise.
London-traded Brent, the global benchmark for crude, hovered at $68.68 by 2:45 PM ET (18:45 GMT), up $1.63, or 2.4%, on the day. Brent dropped 3.3% in the previous session, also its most since April 5.
For the week, the global crude benchmark showed a gain of 0.6%, adding to last week’s 1.5% advance and the prior week’s 1.7% rise.
Friday’s rebound in oil was helped by short-covering on the previous day’s activity and a second day of broad gains on Wall Street after three prior days of carnage.
Also fueling the market – literally – was optimism about gasoline demand in the next two weeks before the May 31 Memorial Day holiday in the U.S., which typically serves as the starting gun for the summer race in oil prices as demand peaks from Americans setting out on long road trips.
The American Automobile Association expects as many as 37 million road travelers on this Memorial Day, up 60% from last year’s pandemic-suppressed 23 million.
“The restart of the pipeline is very positive news for motorists,” AAA spokesperson Jeanette McGee said as Colonial resumed its work of delivering fuel to 45% of the U.S. East Coast after a six-day shutdown.
“While impact won’t be seen immediately and motorists in affected areas can expect to see a few more days of limited fuel supply, relief is coming,” McGee said. “Station pumps will be full of fuel in several days. This is an especially good update ahead of the Memorial Day holiday.”
The pipeline was downed by a cyberattack and reopened after its operator reportedly paid a $5 million ransom to the hackers of its system. Neither the company nor the White House, which initially intervened in the matter, have confirmed the payment of any ransom.
The outage initially caused a 3% spike in gasoline futures that spilled over into the crude market as many pumps across the East Coast ran out of fuel. Many of those gains evaporated on Thursday’s news of the pipeline’s reopening. On Friday, gasoline futures were back up 1.3%, hovering at $2.12 per gallon.
The pump price of gasoline remained not far from this week’s seven-year high of around $3 per gallon.
“The national average is likely to continue to see fluctuation in the coming days and states where prices have spiked will see some relief as the pipeline becomes fully operational,” said Phil Flynn, energy analyst at the Price Futures Group brokerage in Chicago.
Aside from gasoline, the market’s focus was on the Covid situation in India, the world’s third biggest oil consumer, where 4,000 people died from the virus for the third straight day and total infections crossed 24 million.
India is in the grip of the highly transmissible B.1.617 variant of the coronavirus, first detected there and now appearing across the globe. Prime Minister Narendra Modi said his government was “on a war footing” to try to contain the strain.
“India remains a key theme for the energy markets and as their curve slowly bends, that will lead to a complicated increase in production,” Ed Moya, analyst at OANDA, said.
“WTI crude seems poised to be stuck in the mid-$60s, but if the dollar weakness accelerates, that could be enough to trigger a move above the March high of $67.98.”
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Natural Gas Prices Jump On Smaller-Than-Expected U.S. Inventory Build
The U.S. benchmark natural gas price reversed losses from earlier on Thursday and turned higher after the Energy Information Administration reported a smaller-than-forecast injection into storage.
As of 11:30 a.m. on Thursday, the price of natural gas at Henry Hub was up by 2.34 percent at $2.754/ MMBtu. At the start of trading on Thursday, the price was at $2.688/ MMBtu, down from Wednesday’s close at $2.776/ MMBtu.
The EIA’s weekly natural gas storage report showed today that working gas in storage was 1,883 billion cubic feet (Bcf) at the end of the week to April 16. This represents a net increase of 38 Bcf from the previous week.
A Reuters poll had expected an injection of 49 bcf for the week to April 16, which would have been higher than normal.
The actual EIA estimate, however, came in very close to the five-year (2016-2020) average injection of 37 bcf.
As per the EIA data, natural gas stocks in the United States at the end of the week to April 16 were 251 Bcf less than last year at this time and 12 Bcf above the five-year average of 1,871 Bcf.
At 1,883 Bcf, total working gas is within the five-year historical range.
Natural gas prices were also up on Thursday amid continued record exports of pipeline gas and liquefied natural gas (LNG) out of America, as well as cooler weather forecasts for the coming days, which is expected to drive heating demand higher.
“A strong late season cold shot continues to impact the eastern 2/3 of the country with rain, snow, and chilly lows of 20s to 40s for strong national demand, coldest over the N. Plains/Midwest, and interior Northeast,” Natgasweather.com said on Thursday. Overall, demand for heating is expected to be high through Sunday-Monday, and turn low after that.
By Tsvetana Paraskova for Oilprice.com
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