US stocks pared earlier losses and ended with good gains on Thursday, 06 June, 2013. Stocks ended higher on Thursday, snapping a two-session losing streak, as investors eagerly awaited Friday's May employment report for clues about monetary policy.
For the day, the Dow rose 80.03 points, or 0.5%, to end at 15,040.62. The Nasdaq gained 22.58 points, or 0.7%, to finish at 3,424.05. The S&P 500 index rose 13.66 points, or 0.9%, to end at 1,622.56. Dow was trading lower by 116 points earlier during the day.
Telecommunications was the top gainer among the 10 major industry groups, all of which finished in positive terrain. Telecommunications giant Verizon Communications was the biggest gainer in the Dow. Oil major Chevron was the biggest decliner in the blue-chip index.
The results of the monthly monetary policy meetings of the European Central Bank and Bank of England saw no changes in interest rates. Neither central bank was expected to make any major policy announcements or interest rate changes. The Euro currency rallied and the dollar index slumped by some upbeat comments on the European Union's economic prospects in the coming months from ECB president Draghi.
Draghi said the ECB sees a gross domestic contraction of 0.6% in 2013 versus a March forecast of a 0.5% drop. The ECB lifted its 2014 growth forecast slightly, to 1.1% from 1%.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 1% on Thursday.
Coinciding with the move was significant greenback weakness as the Dollar Index faced heavy selling pressure into the early afternoon. Although many currencies were boosted by the dollar selloff, none was greater than the strength of the Japanese yen, which at its best levels was up more than 3.0% against the dollar at 95.89. The significant movements in the foreign exchange market were followed by chatter suggesting a forced liquidation trade may have been the culprit behind the sharp downdraft in the dollar.
Regarding economic data expected at Wall Street, the initial claims level fell to 346,000 for the week ending 1 June from an upwardly revised 357,000 (from 354,000) for the week ending 25 May. The consensus expected the initial claims level to drop to 348,000. For the past few weeks, the initial claims level has bounced around the 350,000 level without showing any signs of picking up traction, up or down. Labor market conditions appear to be stable at a level that is consistent with payroll growth above 150,000.
German factory orders slid more than forecast in April, figures showed today. Export growth in China, the biggest copper consumer, probably grew in May at half the pace of a month earlier. RBC Capital Markets cut its 2013 forecast for copper prices by 9.3%.
Crude-oil prices ended solidly higher on Thursday, 06 June 2013 at Nymex. Prices rose following the weak dollar and traders' anticipation about the latest employment data. Prices were also supported by yesterday's weekly inventory report from energy department showing more than expected drop in crude stockpiles for last week. Light and sweet crude for July ended higher by $1.02 (1.1%) at $94.76 a barrel on the New York Mercantile Exchange on Thursday.
Bullion metal prices ended substantially higher on Thursday, 06 June 2013 helped by a weak dollar. Comex gold futures prices ended the U.S. day session with solid gains and hit a three-week high on Thursday, ahead of Friday's U.S. jobs report. A sharply lower U.S. dollar index also supporting good buying interest in gold.
Gold for August delivery ended higher by $17.3 (1.2%) at $1,415.8 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. It fell to a low of $1391.2 earlier during the day. July silver ended higher by $0.235 cents (1.1%) at $22.71 an ounce on Thursday.
Indian ADRs ended mostly higher on Thursday. In the IT space, Infosys was up 0.2% and Wipro was unchanged. In the Banking space, HDFC Bank was down 0.2% and ICICI Bank was up 2%. In the Telecom space, Tata Communication was up 2%. In other space, Tata Motors was up 1.5%, Dr Reddys was up 1.7% and Sterlite was up 0.6%.
For tomorrow, all eyes will be turned to the May nonfarm payrolls report, which is scheduled to be released at 8:30 ET. In addition, May nonfarm private payrolls, the unemployment rate, hourly earnings, and the average workweek will all be reported at 8:30 ET. The day's economic news will be topped off by the 15:00 ET report on April consumer credit.
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