Strong weekly gains for the indices though
US stocks ended with good gains for the week that ended on 12 April, 2013. Indices gained between 2% to 3% for the week. The earning season kicked off during the week with Alcoa reporting its earnings and beating estimates. The tech sector remained under pressure after the International Data Corporation indicated first-quarter PC shipments plunged. Stocks managed to pare most of their losses on Friday and end flat on the last trading day of the week.
For the week, the Dow ended higher by 299.81 points (2.8%) at 14,865.06. Nasdaq ended higher by 91.09 points (2.8%) at 3,294.95. S&P 500 ended higher by 35.57 points (2.3%) at 1,588.85.
On Monday, stocks spent the bulk of Monday's session in negative territory before afternoon buying lifted the major averages out of the red. As a result, the S&P 500 settled higher by 0.6%. Although stocks finished with gains, leadership was mixed. Both consumer sectors ended ahead of the broader market with the defensively-oriented staples in the lead.
On Tuesday, equities settled just off their best levels of the session with the S&P 500 gaining 0.4%. After opening on a higher note, stocks alternated between gains and losses until afternoon action sent the major indices to their highs. Steelmakers rallied across the board.
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Wednesday saw the S&P 500 rise 1.2% as technology, health care, and industrials outperformed the broader market. On the downside, homebuilders sat out the broad market rally.
On Thursday, the S&P 500 rose 0.4%, but technology stocks did not participate in the advance. The sector was under pressure after the International Data Corporation indicated first-quarter PC shipments plunged 14%. This marked the largest decline on record since IDC began tracking shipments in 1994, and pressured major tech names.
On Friday, 12 April 2013, U.S stocks pared sharp losses following weak March retail sales and consumer sentiment data, but the rebound wasn't enough to extend the week's winning streak by another day. The Dow Jones Industrial Average slipped 0.08 point to close at 14,865.06. The Nasdaq Composite slid 5.21 points, or 0.2%, to close at 3,294.95, after trading as low as 3,271.02 on the session. The S&P 500 lost 4.52 points, or 0.3%, to close at 1,588.85.
Among the thirty Dow components, 17 out of 30 components ended lower. Alcoa and DuPont led the index lower. Consumer-driven stocks, utilities, and telecoms were positive on the day, backing the year's trend where defensive sectors have outperformed cyclical stocks. The notable underperformance of energy and materials was largely due to the weakness in the commodity complex.
The tech space underperformed the broader market as well. Major sector components saw general weakness as Apple lost 1%. Notably, Infosys plunged 20.7% after the company reported a revenue miss, and guided full-year 2014 revenue below consensus.
Financials also finished among the laggards after JPMorgan Chase and Wells Fargo reported their first quarter results. Although both banks beat their bottom-line estimates, their revenues fell short of expectations. In addition, net income margins continued to trend lower for both.
There were euro zone concerns creeping out of Cyprus again on Friday. There were euro zone concerns creeping out of Cyprus again on Friday. According to reports, eurozone finance ministers approved a 10 billion euro bailout for Cyprus on Friday. The report said in order for Cyprus to meet its financing needs over three years, the country will need to find 13 billion euros by itself, likely coming from the closure of its Laiki bank and the restructuring of the Bank of Cyprus.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.4%.
At Wall Street, Friday's economic data showed March retail sales declined 0.4%, while the market had expected an unchanged reading. The prior month's reading pointed to an increase of 1.0%. Excluding autos, retail sales declined 0.4%, which was lower than the expected unchanged reading.
The preliminary University of Michigan Survey for April came in at 72.3, which was lower than the 78.6 that was posted in the prior month, and worse than the reading of 78.0 that had been expected by the consensus. Also, March producer prices declined 0.6%, which was cooler than the downtick of 0.1% forecast by the consensus. Core producer prices rose 0.2%, while the consensus expected an uptick of 0.1%.
Bullion metal prices ended substantially lower on Friday, 12 April 2013. Prices dropped to their lowest levels in almost twenty-one months. Recent cuts to gold-price forecasts continued to hurt sentiment, prompting investors to lose confidence in gold as a safe-haven investment. Prices dropped despite a weak dollar.
Gold for June delivery ended lower by $63.5 or 4.1% at $1,501.4 an ounce on the Comex division of the New York Mercantile Exchange on Friday. It fell to a low of $1,491.4 during intra day trading. Prices had shed 4.7% for the week. May silver ended lower by $1.37 cents (4.9%) at $26.33 an ounce on Friday. Prices had lost 3.3% for the week.
Crude-oil prices ended substantially lower on Friday, 12 April 2013 at Nymex. Prices fell despite a weak dollar due to mixed set of economic data at Wall Street. Also, renewed worries over Cyprus and recent downgrades to global oil-demand forecasts combined to push prices to their lowest close in over a month. Light and sweet crude for May fell by $2.22 or 2.4% to settle at $91.29 a barrel on the New York Mercantile Exchange on Friday. Prices fell 1.5% for the week.
For each two advancing stock on the New York Stock Exchange, three declined, with volume topping 700 million shares. On the Nasdaq, it was about the same, with volume just over 390 million. Composite volume topped 3.2 billion shares for the NYSE, and 1.4 billion shares for the Nasdaq at the close.
Indian ADRs ended mixed on Friday. In the IT space, Infosys was down 20.7% and Wipro was down 4.9%. In the Banking space, HDFC Bank was up 0.4% and ICICI Bank was down 1.8%. In the Telecom space, Tata Communication was down 0.5%. In other space, Tata Motors was down 0.6%, Dr Reddys was down 0.2% and Sterlite was down 0.9%.
For the year, the Dow, Nasdaq and S&P 500 are trading higher by 13.4%, 9.1% and 11.4% respectively. On Monday, April Empire Manufacturing Survey will be reported at 8:30 ET. February net long-term TIC flows and the April NAHB Housing Market Index will be released at 9:00 ET and 10:00 ET, respectively.
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