Concerns over conflict in Ukraine outweigh an upbeat jobs report
US stock market finished an upbeat week on a cautious note on Friday, 02 May 2014. U.S. stocks closed slightly lower on Friday, capping weekly gains, as concerns over conflict in Ukraine outweighed an upbeat jobs report. A surprisingly stronger-than-expected jobs report lifted both the S&P 500 and the Dow Jones Industrial Average to record levels, but rally proved to be short-lived.
The Dow Jones Industrial Average lost 45.98 points, or 0.3% to 16,512.89, but still recorded a gain of 0.9% over the past week. The Nasdaq Composite finished the day 3.55 points, or 0.1%, lower at 4,123.90 and gained 1.2% over the week. The S&P 500 ended the day 2.54 points, or 0.1%, lower at 1,881.14 and gained 1% over the week.
One hour ahead of the opening bell, the April Nonfarm Payrolls report pointed to the addition of 288,000 jobs (consensus 210,000), but the release was a bit mystifying as a sharp drop in the labor force pressured the unemployment rate to 6.3% from 6.7%.
Tensions surrounding Russia, Ukraine and the West have been a key focus for oil traders, as Russia is one of the world's largest producers of crude oil. The tensions in Ukraine were on the rise on Friday, following reports the Ukrainian military is moving to take back a Russian separatist-occupied city in eastern Ukraine.
Among otehr data expected at Wall Street, factory orders increased 1.1% in March after increasing a downwardly revised 1.5% (from 1.6%) in February. The consensus expected factory orders to increase 1.6%. Durable goods orders were revised up, increasing 2.9% from an originally reported 2.6%. Orders increased 2.3% in February. Excluding transportation, durable goods orders increased 2.4%, up from an originally reported 2.0%.
On the corporate side, shares of LinkedIn dropped 8.4% after the online networking service said late Thursday it swung to a loss of $13.32 million. Merck slipped 2.4% after reports German drug maker Bayer is in exclusive talks to buy Merck's consumer-health care unit for $14 billion.
Bullion prices emded with good gains on Friday, 02 May 2014. Gold prices settled above $1,300 an ounce on Friday, scoring their first gain in five sessions, with reports of escalating violence in Ukraine and a call from Russia for an emergency United Nations meeting fueled safe-haven demand for the metal. Support from the increasing tension over Ukraine offset earlier pressure from a stronger-than-expected U.S. jobs report.
Gold for June delivery jumped $19.50, or 1.5%, to settle at $1,302.90 an ounce on the Comex division of the New York Mercantile Exchange. Prices had turned negative after the employment data, seesawed between losses and gains, then rallied following news reports surrounding Russia and Ukraine. Prices ended 0.2% higher for the week.
July silver spiked 50 cents, or 2.6%, to end at $19.55 an ounce, with prices based on the most-active contracts down about 0.7% from the week-ago close.
Crude Oil futures settled higher on Friday, 02 May 2014 as an unexpectedly strong jump in April nonfarm payrolls helped boost the prospects for energy demand, and reports of Russia's call for an emergency United Nations Security Council meeting renewed concerns over global crude supplies. Prices logged their first gains in three sessions, but still ended the week with a loss.
Crude oil for June delivery tacked on 34 cents, or 0.3%, to settle at $99.76 a barrel on the New York Mercantile Exchange, after briefly topping $100 in the immediate wake of the jobs report and then again as reports of Russia's request for the U.N. meeting to discuss Ukraine emerged. For the week, however, prices fell 0.8%, weighed down in large part due to hefty U.S. crude stockpiles.
Indian ADRs ended higher on Friday. In the IT space, Infosys rose 0.28% at $53.47 and Wipro was up 0.84% at $12.03. In the banking space, HDFC Bank gained 0.25% at $40.31, while ICICI Bank shed 0.14% at $42.71. In the other sectors, Dr Reddy's Laboratories jumped 1.33% at $45.88 and Tata Motors added 0.27% at $37.42.
Trading volume was below average as less than 685 million shares changed hands at the NYSE.
On Monday, the ISM Services report for April will be released at 10:00 ET (consensus 54.0).
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