Mixed economic reports take a toll on stocks on Friday
US stocks ended with strong losses for the week that ended on 31 May, 2013. Indices lost a little more than 1 for the week. Most of the weekly losses were accrued on the last trading day of the week when indices suffered big losses.
For the week, the Dow ended lower by 187.53 points (1.2%) at 15,115.6. Nasdaq ended lower by 3.23 points (0.1%) at 3,455.91. S&P 500 ended lower by 18.86 points (1.1%) at 1,630.74.
Financials have performed the best in May, followed by industrials and technology, with investors rotating in and out of sectors in search of bargains.
On Monday, equity and bond markets were closed in observance of Memorial Day.
Tuesday ended with solid gains for the major indices. The early action saw nine of ten sectors register gains of at least 1.0%. However, the defensively-geared utilities spent the entire day in negative territory before ending lower by 1.2%.
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Wednesday saw the major averages settle with modest losses as the S&P 500 shed 0.7%. Equities slipped out of the gate as sellers drove the major averages to their lows 90 minutes into the session. However, the relative weakness of several influential groups like energy and health care kept the benchmark average from regaining its flat line.
On Thursday, stocks settled with modest gains as late afternoon selling knocked the major averages from their highs following a headline from Nikkei news, indicating Japan plans to impose new foreign exchange margin trading rules. The news caused dollar/yen to slip into the red while also weighing on equities. Most major financials saw gains of at least 1.0% as Morgan Stanley climbed 3.4% to outperform its peers.
On Friday, 31 May 2013, U.S. stocks fell sharply as Wall Street closed another month of gains with a whimper after mixed economic reports. Equities saw losses in the opening minutes of the session as cautious overseas action kept buyers at bay. Contributing to the overseas softness was chatter questioning the strength of manufacturing PMI report out of China. Shortly after the open, the key indices were able to erase most of their early losses in reaction to a pair of better-than-expected economic data points.
After rising 67.8 points, the Dow Jones Industrial Average ended down 208.96 points, or 1.4%, at 15,115.57, its steepest drop since mid-April. The Nasdaq Composite lost 35.38 points, or 1%, to 3,455.91. S&P 500 index declined 23.67 points, or 1.4%, to 1,630.74, with health care and energy hardest hit among its 10 industry groups.
All ten sectors settled in the red as two defensive groups, consumer staples and health care, led to the downside.
Intel Corp. led gains that included just two of the blue-chip index's 30 components. Intel's gains came a day after reports that Samsung Electronics had picked an Intel processor to power a new version of one of its tablets.
The dollar reversed its decline on Friday, with the dollar index rising by 0.5%.
On Friday morning, Chicago PMI data rose to a reading of 58.7 in May, the best reading in more than a year, beating expectations of 49.9. Separately, the University of Michigan and Thomson Reuters consumer-sentiment index jumped to a final May reading of 84.5, also rising more than economists had forecast.
Looking at Friday's remaining economic data reveals a disappointment in the Personal Income and Spending report for April. Income was flat and spending declined 0.2% while the consensus expected both measures to be up 0.1%. Core PCE was also flat compared to a 0.1% increase in March. Personal income for March was revised up to 0.3% from 0.2% while spending was revised down to 0.1% from 0.2%.
For every stock rising, more than five fell on the New York Stock Exchange, where more than 1.1 billion shares traded.
Bullion metals ended lower at Comex on Friday, 31 May 2013. Gold futures settled below $1,400 on Friday to cap a decline for May, the seventh monthly drop in the last eight months. A strongdollar pushed prices lower. A weaker dollar tends to help the prices of gold and other dollar-denominated commodities by making them cheaper for holders of other currencies.
Gold for August delivery fell $19, or 1.4%, to settle at $1,393 an ounce on the New York Mercantile Exchange's Comex division. Gold futures fell 5.4% in May, compared with the settlement of $1,472.10 for the most-active contract on April 30. July silver shed 45 cents, or 2%, to close at $22.24 an ounce on Friday.
Crude oil futures finished lower on Friday, 31 May 2013 at Nymex suffering losses for the week and month, as pessimism among traders over the outlook for energy demand fueled a drop in prices below $92 a barrel. The market also assessed the Organization of the Petroleum Exporting Countries' decision to keep its oil production target unchanged, despite worries about energy demand and rising U.S. output.
Crude for July delivery lost $1.64, or 1.8%, to settle at $91.97 a barrel. For the week, crude futures lost 2.3%. For the month, prices fell 1.8%.
Indian ADRs ended mostly lower on Friday. In the IT space, Infosys was up 0.07% and Wipro was down 2.6%. In the Banking space, HDFC Bank was down 3.9% and ICICI Bank was down 4.1%. In the Telecom space, Tata Communication was down 3.4%. In other space, Tata Motors was down 4.3%, Dr Reddys was down 1.04% and Sterlite was up 1.07%.
For the year, the Dow, Nasdaq and S&P 500 are trading higher by 15.3%, 14.5% and 14.3% respectively.
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