US stocks ended with strong gains for the week that ended on 17 May, 2013. Indices gained between 1% to 2% for the week. Earning and economic reports from domestic and global places hit the wires during the week. Stocks rose once again on Friday, 10 May, the last trading day of the week following better than expected economic reports.
For the week, the Dow ended higher by 235.91 points (1.6%) at 15,354.4. Nasdaq ended higher by 62.39 points (1.8%) at 3,498.97. S&P 500 ended higher by 33.77 points (2.1%) at 1,667.47.
On Monday, the week started on a bit of a nervous and flat note after reports indicated the Fed has mapped out a strategy for tapering its asset purchases. The headline itself was enough to cause a pause in the buying action and to overshadow what was a better-than-expected retail sales report for April.
When Tuesday rolled around, buyers were back in action. The market padded its gains in the face of a disappointing outlook from Deere and weak readings for industrial production in April and the Empire Manufacturing report for May.
Thursday saw a turn in the action, but not until late in the day when the major averages surrendered modest gains that had been posted despite more disappointing economic news that took the form of the weekly initial claims, housing starts, and Philadelphia Fed Index reports.
On Friday, 17 May 2013, U.S. stocks advanced to a fourth weekly gain, with both the Dow industrials and the S&P 500 at all-time closes, after data cast a positive spin on the economy. The Dow Jones Industrial Average rose 121.18 points on Friday to 15,354.40, with J.P. Morgan Chase leading blue-chip gains. The Nasdaq Composite advanced 33.72 points to 3,498.97. The S&P 500 climbed 17 points, or 1%, to 1,667.47, with energy leading gains and consumer staples the worst performing of its 10 sectors.
Off the Dow, Northrop Grumman gained 4% after the weapons manufacturer said it would expand its share-buyback program.
There was little fixation on the disappointing earnings reports from Dell, J.C. Penney, Autodesk and Nordstrom as the broader trend of capitalizing on the Fed's liquidity support continued to drown out any disappointing developments.
Although things settled down, the market's bullish underpinnings were solidified by the stronger-than-expected University of Michigan Consumer Sentiment report for May and the Leading Indicators report for April. The former checked in at 83.7 versus 76.4 in the prior month and the consensus estimate of 78.5.
In turn, the Index of Leading Indicators showed a 0.6% increase versus a 0.2% decline in March and the consensus estimate of 0.3%.
Friday's economic news helped mitigate the disappointment of Thursday's generally underwhelming news for initial claims, housing starts, and the Philadelphia Fed Index.
In the currency market on Friday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.8%. The dollar got a boost on Thursday after San Francisco Federal Reserve President John Williams said that the Fed could slow its $85 billion-a-month bond-buying program as soon as this summer if the economy expands in line with his forecasts.
Crude-oil futures gained on Friday 17 May 2013 at Nymex after data showed a rise in U.S. consumer sentiment in May, boosting optimism about the economic recovery. A strong dollar restricted the price rise though. Crude oil for June delivery added 86 cents (0.9%) to settle at $96.02 a barrel on the New York Mercantile Exchange. Oil futures traded as high as $96.45 a barrel earlier Friday, but they pared gains as the dollar strengthened.
Bullion metal prices fell on Friday, 17 May 2013 at Comex. Gold futures slumped on Friday for a seventh consecutive session, as the dollar index jumped to nearly three-year highs and U.S. data raised optimism about the economic recovery.
Gold for June delivery settled down $22.20 (1.6%) to $1,364.70 an ounce on the New York Mercantile Exchange. The metal has fallen by $109 in the last seven sessions, with gains for U.S. stocks and the dollar among the factors that have curbed gold's attraction for investors. July silver fell 31 cents (1.4%) to $22.35 an ounce on Friday.
For every stock falling, nearly three gained on the New York Stock Exchange, where 750 million shares traded.
Indian ADRs ended mixed on Friday. In the IT space, Infosys was up 1.5% and Wipro was up 1.9%. In the Banking space, HDFC Bank was up 1.5% and ICICI Bank was up 0.8%. In the Telecom space, Tata Communication was down 2.7%. In other space, Tata Motors was up 1.2%, Dr Reddys was down 1.6% and Sterlite was down 1.3%.
For the year, the Dow, Nasdaq and S&P 500 are trading higher by 17.2%, 15.9% and 16.9% respectively.
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