US stocks witness mixed finish on Friday as Dow pares earlier gains

Indices suffer substantial weekly losses as Eurozone's troubles hang over investors' heads

US stocks ended with substantial losses for the week that ended on Friday, 16 December 2011. The first three sessions of the week saw stocks decline. A lack of progress by Europe's leaders in restoring economic and financial conditions in both the core and periphery of the continent often hung over the minds of many traders. Those themes also implicated the euro; it dropped to an 11-month low during the middle of the week before making a modest recovery in the later half of the week.



For the week, that ended on Friday, 16 December 2011, Dow ended lower by 317.9 points, or 2.6% to end at 11,866.4. The Nasdaq shed 91.52 points or 3.5% to end at 2555.33. The S&P 500 lost 35.53 points (2.8%) to end at 1,219.66.

Action this week began with participants discouraged by data that showed China, a key player in keeping the global economy afloat, experienced a slowdown in export growth during November. Concerns were also raised about the formidable task associated with the efficient implementation of plans established during the previous week's eurozone summit.

Data for the week featured retail sales numbers for November that featured a 0.2% increase in both total sales and sales less autos. Total sales had been expected to increase by 0.6%, while sales less autos had been generally expected to post a 0.5% increase. The latest initial weekly jobless claims tally dropped to a 43-month low of 366,000 as against an expected figure of 390,000.

December readings for the Empire State Manufacturing Survey and the Philadelphia Fed Survey improved to 9.5 and 10.3, respectively. It was generally expected that the Empire State Manufacturing Survey would improve to 3.0 and that the Philly Fed Survey would improve to just 4.5. Separately, report showed that industrial production declined by 0.2%, which contrasted with the consensus call for a 0.2% increase. Industrial production last declined in April.

Corporate news was mixed this week. Dow component and semiconductor bellwether Intel disappointed investors at the beginning of the week by issuing a cautious outlook. Electronics retailer Best Buy posted earnings that came short of what Wall Street had expected. On the positive side of things, FedEx reported a better-than-expected bottom line. A strong quarterly report from Adobe Systems proved pleasing to investors at week's end.

U.S. stocks on Friday, 16 December 2011 finished in a mixed mode after a rating agency warning on Europe pulled the plug on what began as an upbeat session on a confidence vote in Italy. After a 99-point rise, the Dow Jones Industrial Average declined 2.42 points, or less than 0.1%, to 11,866.39. The Nasdaq Composite added 14.32 points, or 0.6%, to 2,555.33. The S&P 500 rose 3.89 points, or 0.3% on Friday, to 1,219.65. The energy sector was up the most and utilities were hardest hit among its 10 industry groups.

In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies scaled back some of its gains after a better-than-expected result for a Spanish debt auction, and better-than-expected U.S. jobless claims data on Thursday. The dollar index climbed 0.03% later during the day after stocks dropped.

The stock market bid higher in the early going on Friday, but for the second straight session its failure to overcome resistance resulted in selling that left the major averages to finish the week in relatively mixed fashion. Stocks benefited earlier from strong buying on above-average volume, which was inflated by quadruple witching options expiration.

But Dow pared all its gains after Fitch Ratings affirmed France's top Triple-A credit rating, but warned of a potential down grade for six other euro-using nations, placing Belgium, Spain, Slovenia, Italy, Ireland and Cyprus under review, calling a broad solution to Europe's debt crisis “technically and politically beyond reach.”

Making a disappointing debut on the Nasdaq, shares of Zynga fell 5% to $9.50 each after the online-game maker priced an initial public offering at $10 a share.

November price data were also posted on Friday. Overall producer prices increased by 0.3%, but core prices increased by 0.1%. Total consumer prices were flat, but core prices increased by 0.2%. All producer price measures and consumer price measures had been expected to increase by 0.1%. There was nothing unusual in the core data that suggests inflationary problems may be gaining traction as we head into 2012.

Crude prices ended modestly lower on Friday, 16 December 2011 at Nymex. Prices fell as US stocks pared almost all their gains and ended in a mixed mode at the end with the Dow ending in the red while going into close. Light and sweet crude for January delivery fell $0.34 (0.4%) to $93.43 a barrel on the New York Mercantile Exchange on Friday. Oil traded as low as $92.52 and as high as $94.79 a barrel during the day. For the week, crude lost 5.9%.

Precious metals ended higher on Friday, 16 December 2011 at Comex. Prices rose as traders mulled over the fact that recent drop in price for bullions was overdone. Prices also rose as the dollar stayed steady. Despite Friday's gains, bullion registered substantial weekly losses. Gold for February delivery ended higher by $20.7 or 1.3%, to end at $1,597.9 an ounce on the Comex division of the New York Mercantile Exchange on Friday. For the week, the yellow metal lost 6.8%. On Friday, silver prices for March delivery rose $0.40 or 1.4% to end at $29.67. For the week, silver lost 8%.

Red metal prices ended higher on Friday, 16 December 2011 at Comex. Copper rose on Friday, due to a retreating dollar and firm U.S. economic data, but gains look vulnerable going into next week with Europe's debt crisis and its impact on metals demand still causing concern. A steadier tone in wider markets, and a halt in the slide of the euro against the dollar was lending metals some support on Friday. Copper for March delivery ended higher by 6 cents (2%) at $3.33 a pound at Comex on Friday. For the week, copper lost 5.9%.

For every two stock that lost ground nearly two gained on the New York Stock Exchange, where nearly 1.8 billion shares traded; composite volume neared 5 million.

Indian ADRs ended mostly lower on Friday. In the banking space, HDFC Bank ended down 4.6% at $5.21 and ICICI Bank ended down 1.2% at $25.33. In the telecom space, MTNL closed down 2.2% at $0.9. In the other space, Sterlite was down 3.1% at $6.86, Tata Motors was down 1.2% at $15.94.

For the year till date, the Dow is trading higher by 2.5%. The Nasdaq and S&P 500 are trading lower by 3.7% and 3% respectively till date.