Stocks Close Modestly Higher But Well Off Best Levels - U.S. Commentary

(RTTNews) - Stocks turned in a relatively lackluster performance over the course of the trading day on Friday after pulling back off their early highs. The choppy trading came as traders kept an unusually close eye on developments in the currency markets.

The major averages eventually ended the session modestly higher. The Dow rose 35.00 points or 0.2 percent to 17,576.96, the Nasdaq inched up 2.32 points or 0.1 percent to 4,850.69 and the S&P 500 climbed 5.69 points or 0.3 percent to 2,047.60.

Despite the gains on the day, the major averages moved lower for the week. The Nasdaq slid by 1.3 percent, while the Dow and the S&P 500 both dropped by 1.2 percent.

The early strength on Wall Street reflected renewed risk appetite after global economic concerns contributed to significant weakness in the previous session.

A decrease by the value of safe haven Japanese yen added to the early buying interest, although the yen subsequently rebounded and contributed to the pullback by the markets.

The U.S. dollar has edged slightly lower to 108.19 yen compared to the 108.21 yen it fetched at the close of New York trading on Thursday. The greenback reached a high of 109.10 yen earlier in the day.

Meanwhile, a substantial rebound by the price of crude oil helped to provide some support for the markets on the day.

Crude oil for May delivery surged up $2.26 to $39.52 a barrel after sliding $0.49 to $37.26 a barrel in the previous session.

The rebound by the price of crude oil came as Russian Energy Minister Alexander Novak said he hopes oil producing nations will agree to an output freeze at a meeting later this month.

In remarks earlier in the day, New York Fed President William Dudley said he believes a cautious and gradual approach to policy normalization is appropriate.

Dudley said downside risks have diminished since earlier this year but noted there continues to be significant uncertainty about how economic growth prospects abroad will affect the U.S. economic outlook.

Sector News

Despite the lackluster close by the broader markets, substantial strength was visible among steel stocks. Reflecting the strength in the sector, the NYSE Arca Steel Index surged up by 5 percent to a seven-month closing high.

Brazil's Gerdau (GGB) and CSN (SID) posted standout gains on the day, jumping by 14.2 percent and 12.1 percent, respectively.

Gold stocks also showed a strong move to the upside, driving the NYSE Arca Gold Bugs Index up by 4.2 percent. With the gain, the index reached its best closing level in well over a year.

The strength among gold stocks came amid an increase by the price of the precious metal, with gold for June delivery climbing $6.30 to $1,243.80 an ounce.

Energy stocks also hung on to strong gains amid the sharp increase by the price of crude oil. The NYSE Arca Natural Gas Index shot up by 3.2 percent, the Philadelphia Oil Service Index jumped by 3 percent and the NYSE Arca Oil & Gas Index spiked by 2.6 percent.

Railroad stocks also moved notably higher on the day, while moderate weakness was visible among biotechnology stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Friday. Japan's Nikkei 225 Index climbed by 0.5 percent, while China's Shanghai Composite Index dropped by 0.8 percent.

Meanwhile, the major European markets all showed strong moves to the upside on the day. While the French CAC 40 Index surged up by 1.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index jumped by 1.1 percent and 1 percent, respectively.

In the bond market, treasuries gave back ground after ending the previous session notably higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.9 basis points to 1.720 percent.

Looking Ahead

Economic data may drive trading next week, with traders likely to keep a close eye on reports on retail sales, industrial production, and producer and consumer price inflation.

Additionally, aluminum giant Alcoa (AA) is due to release its first quarter results after the close of trading next Monday, marking the unofficial start of earnings season.

Financial giants JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C) are also due to release their quarterly results next week.