US stocks ended with strong gains on Tuesday, 14 May 2013. Equity futures suggested slim losses at the start of the session. Then stocks on Tuesday rallied to another record-breaking close as Wall Street embraced the view of a still-improving economy.
For the day, the Dow ended higher by 123.57 points (0.82%) at 15,215.25. Nasdaq ended higher by 23.82 points (0.7%) at 3,462.61. S&P 500 ended higher by 16.57 points (1.01%) at 1,650.34.
Financial shares fared best among its 10 major industry groups. Twenty six out of thirty Dow components ended higher led by Bank of America.
The technology sector did not play much role in today's rally though. Tech shares lagged throughout the day while afternoon weakness displayed by Apple caused the sector to slip off its highs.
The underperformance of technology weighed on the Nasdaq, which trailed behind the other two major indices. However, the relative strength of biotechnology kept the index from falling too far behind the Dow and S&P.
It was an uneventful overnight trade in Asia and Europe Tuesday. Fresh economic data from Europe was mixed Tuesday. The German ZEW index for May came in at 36.4 versus 36.3 in April, but below expectations of 39.5. However, European Union industrial production rose 1.0% in March, the largest monthly increase in 1.5 years.
Australia's government budget was released on Tuesday and it hinted further easing of that country's monetary policy is very possible. That news dropped the Aussie dollar to an 11-month low versus the greenback.
Investors considered the possible curtailing of monetary-policy stimulus by the Fed. The central bank's easy monetary policy tends to raise the risk of inflation, as well as put pressure on the dollar. Gold is seen as a hedge against inflation and as a dollar-denominated commodity, can benefit from a weaker dollar.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.3% on Tuesday.
The rallying U.S. and world stock markets continue to be a major bearish underlying factor for commodities. As the U.S. and Japanese stock markets hit record or multi-year highs, they and other world stock markets continue to pull away investor monies from the other asset classes. The major central banks of the world continue to flaunt their easy-money policies, which have driven interest rates to extremely low levels for an extended period of time.
Crude-oil prices ended lower on Tuesday, 14 May 2013 at Nymex. June crude oil dropped following a strong dollar. Prices were also affected after the International Energy Agency on Tuesday said the oil market is undergoing a supply shock, as production in North America continues to grow at a record pace, with non-OPEC supply alone expected to meet most of the world's rising energy demand.
Light and sweet crude for June ended lower by $0.96 (1%) at $94.21 a barrel on the New York Mercantile Exchange on Tuesday.
The Paris-based agency IEA forecasts North American supply to grow by 3.9 million barrels per day from 2012 to 2018, nearly two-thirds of total forecast non-OPEC supply growth of 6 million barrels per day.
The market now awaits separate weekly reports on U.S. petroleum supplies due late on Wednesday from the U.S. Energy Information Administration. Market expects crude stockpiles to continue to push to record levels, with an expected build of 300,000 barrels in the week ended 10 May. Also, gasoline stocks are expected to have declined 800,000 barrels last week, while distillate stocks likely rose by 800,000 barrels.
Bullion metal prices ended lower on Tuesday, 14 May 2013. Comex gold prices ended the U.S. day session moderately lower Tuesday, on bearish outside market forces, a stronger U.S. dollar index and weaker crude oil prices.
Gold for June delivery ended lower by $9.8 (0.7%) at $1,424.5 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. July silver ended lower by $0.32 cents (1.3%) at $23.38 an ounce on Tuesday.
For every share that fell, more than two gained on the New York Stock Exchange, where 699 million shares traded. Composite volume surpassed 3.4 billion.
Indian ADRs ended mixed on Tuesday. In the IT space, Infosys was down 0.3% and Wipro was down 1.3%. In the Banking space, HDFC Bank was up 0.4% and ICICI Bank was up 0.3%. In the Telecom space, Tata Communication was up 0.3%. In other space, Tata Motors was up 3.3%, Dr Reddys was down 1.7% and Sterlite was down 0.3%.
Tomorrow, the day is heavy in terms of economic data. Investors will receive a full slate of economic data tomorrow starting with the 7:00 ET release of the weekly MBA Mortgage Index. April PPI, core PPI, and May Empire Manufacturing will all be reported at 8:30 ET while March net long-term TIC flows will be announced at 9:00 ET. At 9:15 ET, April industrial production and capacity utilization will cross the wires. The day will be topped off with the 10:00 ET release of the May NAHB Housing Market Index. Among earnings of note, Deere and Macy's will report their results before the opening bell.
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