Author: E.L. & C. Baillieu Stockbroking - by Andrew Thain
- Solid quarterly results from consumer-oriented stocks including Amazon.com overshadowed data on slowing economic growth, pushing benchmarks to their biggest weekly advance since mid-March.
- Most European stock markets closed with weekly gains, after data showed consumer spending picked up in the U.S. A well-received Italian bond auction also boosted sentiment following a double-notch downgrade of Spain's credit rating the day before.
- Oil fell from the highest level in almost four weeks in New York, trimming a second weekly gain, after a cut in Spain’s credit rating renewed concern that Europe’s faltering economy may curb fuel demand.
- Gold traders are more bullish after central banks expanded their bullion reserves and hedge funds increased bets on a rally for the first time in three weeks.
Solid quarterly results from consumer-oriented stocks including Amazon.com overshadowed data on slowing economic growth, pushing benchmarks to their biggest weekly advance since mid-March.
The Dow Jones Industrial Average added 23.69 points, or 0.2%, to 13228.31, on Friday, and the Standard & Poor's 500-stock index advanced 3.38 points, or 0.2%, to 1403.36.
Both rose for the fourth session in a row and recorded the biggest weekly gains for each since March 16. The Dow rose 1.5% this week, while the S&P 500 climbed 1.8%,
Friday's trading pushed the Dow industrials into positive territory for the month. Should the 0.1% gain hold through Monday, blue chips would finish April with their seventh straight monthly advance, the longest streak in five years. The Nasdaq Composite added 18.59 points, or 0.6%, to 3069.20. The technology-oriented Nasdaq climbed 2.3% this week, its biggest weekly rise in nearly three months.
Consumer-discretionary stocks led Friday's gains. Amazon soared $30.86, or 16%, to $226.85, after the online retailer reported first-quarter revenue jumped 34%. Expedia jumped 7.68, or 24%, to 40.31, and hit an all-time high after the online travel agent booked better-than-forecast first-quarter adjusted earnings and revenue.
Most European stock markets closed with weekly gains, after data showed consumer spending picked up in the U.S. A well-received Italian bond auction also boosted sentiment following a double-notch downgrade of Spain's credit rating the day before.
The Stoxx Europe 600 index rose 0.8%, to 259.12, gaining for a fourth consecutive day. The index posted a 0.5% weekly gain. The French CAC-40 index gained 1.1%, to 3266.27, and rose 2.4% on the week, snapping a five-week losing streak.
Most stocks in Asia fell, as concerns over Europe in the wake of a downgrade of Spanish debt offset the Bank of Japan's announcement of fresh easing measures.
Japan's Nikkei Stock Average dropped 0.4%, after rising more than 1% following the central bank's announcement, to finish at 9520.89. The index fell 0.4% on the week and has fallen for four consecutive weeks. Hong Kong's Hang Seng Index climbed 0.3%, to 20741.45, while China's Shanghai Composite Index slipped 0.4%, to 2396.32. Both indexes declined on the week, snapping three-week winning streaks.
South Korea's Kospi held onto gains, adding 0.6%, to 1975.35, after record results from Samsung Electronics. The Kospi edged up less than a point on the week, its first weekly gain in three weeks.
The Australian share market closed weaker on Friday with the benchmark S&P/ASX 200 down 13 points or 0.3 per cent to close at 4363 on Friday and modestly lower for the week.
The All Ordinaries Index fell 12 points or 0.26 per cent to finish at 4433 – down 0.25 for the week. The best performing sector was telecommunications, while the materials was the weakest.
One of the worst performers on Friday was JB Hi-Fi, which sank 5.42Oper cent to $10.04 as the country’s second-largest electrical goods retailer forecast full-year earnings as much as 16 per cent below analyst estimates. ResMed was the week’s top performer, surging 10.5 per cent to $3.26 after the medical-equipment maker reported an 11 per cent increase in third-quarter sales.
Macquarie Group also kicked off the bank reporting season on Friday after forecasting higher earnings after a slump in trading income and deal-making fees that dragged full-year profit to an eight-year low. Macquarie shares climbed 84¢ to $29.27.
Oil fell from the highest level in almost four weeks in New York, trimming a second weekly gain, after a cut in Spain’s credit rating renewed concern that Europe’s faltering economy may curb fuel demand.
Futures slipped as much as 0.8 percent after New York-based Standard & Poor’s reduced Spain’s rating to BBB+ from A and said the nation may have to provide fiscal support to the banking sector as the economy contracts. Prices also dropped after reaching technical resistance.
West Texas Intermediate crude may decline next week after economic confidence in the euro-region fell and the U.S. economy grew less than forecast, a Bloomberg News survey showed.
Gold traders are more bullish after central banks expanded their bullion reserves and hedge funds increased bets on a rally for the first time in three weeks.
Fourteen of 28 analysts surveyed by Bloomberg expect prices to gain next week and nine were neutral, the highest proportion in two weeks. Mexico, Russia and Turkey added about 44.8 metric tons valued at $2.4 billion to reserves in March, International Monetary Fund data show. Fund managers raised their so-called net-long positions by 2.5 percent in the week ended April 17, according to the Commodity Futures Trading Commission.
Gold rose 6.2 percent to $1,664.40 an ounce this year on the Comex in New York, and is now 7.2 percent below this year’s peak. The Standard & Poor’s GSCI gauge of 24 raw materials climbed 5.8 percent as the MSCI All-Country World Index (MXWD) of equities added 9.9 percent. Treasuries gained less than 0.1 percent, a Bank of America Corp. index shows.
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