Stocks move up as crude prices remain at lows
US stocks ended higher at Wall Street on Thursday, 11 December 2014. A rally in the U.S. stock market, sparked by robust consumer spending data on Thursday, fizzled out by the end of the session as indexes pulled back from session highs, prompted by a renewed slide in oil prices. However, selling into the close pressured the indices from their highs.
The Dow Jones Industrial Average rose as much as 216 points by mid-afternoon, but pulled back, ending the day with a gain of 63.19 points, or 0.4%, at 17,596.34. The S&P 500 index closed 8 points, or 0.4%, higher at 2,034. The Nasdaq Composite finished the day up 24.14 points, or 0.5%, at 4,708.16.
Energy sector stocks went from being up 2% to finish flat at the end.
Investors received a pre-market confidence boost from a better than expected Retail Sales report and a larger than expected decline in weekly initial claims. In turn, the data helped the Dollar Index rebound from three consecutive declines. However, the dollar strength wasn't entirely due to economic data as the greenback entered the morning with a solid overnight gain against the yen.
The dollar strength acted as a drag on crude oil, which could not hold its overnight gain. Instead, the energy component spent the bulk of the day near its flat line before sliding to its morning low into the pit close to settle lower by 1.6% at $60.02/bbl.
On the U.S. economic front on Thursday, the Commerce Department released a stronger-than-expected reading on U.S. retail sales that appeared to weigh on investors' interest in the yellow metal. Weekly jobless claims came in at 294,000, while market had expected 296,000.
The market place was calmer on Thursday. U.S. stock indexes were posting solid rebounds in afternoon trading. The dollar got a boost following upbeat weekly U.S. jobless claims and retail sales reports. Gold and silver also saw selling interest limited due to the rallying stock indexes on Thursday.
In overnight news, Russia's central bank raised interest rates by 1.0% in a move designed to prop up the flagging ruble, which is at a record low versus the U.S. dollar and has lost 40% of its value this year. Falling oil prices and Western sanctions against Russia have sunk the ruble.
Chinese economic leaders on Thursday pledged to forge ahead with market-based economic reforms, following a major meeting. The officials said they would keep China's economic growth rate steady, which would be around 7.0% to 7.5% annual growth. However, many China watchers think China's central bank will introduce monetary policy stimulus measures in the coming months. Chinese officials said Thursday there has been downward pressure on their economy and that there are economic risks.
Elsewhere, the technology sector was underpinned by large cap components like Facebook , Google and Microsoft.
Bullion prices ended lower on Thursday, 11 November 2914. Gold slid for a second session on Thursday as a strong report on retail sales hit haven demand and helped U.S stocks.
Gold for February delivery fell $3.80, or 0.3%, to settle at $1,225.60 an ounce. March silverdropped 8 cents, or 0.4%, to settle at $17.11 an ounce.
Crude oil prices slumped further on Thursday, 11 December 2014 with the U.S. crude benchmark settling under $60 a barrel for the first time in more than five years. Hopes for stimulus from global central banks and strong U.S. data initially kept oil above $60. A day earlier, the Organization of the Petroleum Exporting Countries announced it sees less demand for its own oil next year.
On the New York Mercantile Exchange, light, sweet crude for delivery in January fell 99 cents, or 1.6%, to settle at $59.95 a barrel. That marked the lowest settlement since July 14, 2009 for a front-month contract. The U.S. oil benchmark has dropped 44% from its June 20 high.
Treasuries slumped in the morning, but recovered the bulk of those losses during the afternoon. The 10-yr yield ticked up one basis point to 2.18%.
Participation was a little ahead of average with 805 million shares changing hands at the NYSE floor.
Tomorrow, November PPI (consensus -0.1%) will be released at 8:30 ET while the preliminary reading of the December Michigan Sentiment Survey will be reported at 9:55 ET (consensus 89.5).
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