US STOCKS-Tech, financials weigh on S&P, industrials prop up Dow - Reuters News
18-May-2018 11:44:32 PM
- Industrials gain as Sino-US trade talks progress
- Applied Materials forecast weighs on chip stocks
- Campbell Soup's margin warning hits food stocks
- Alphabet drops, Google to feature on CBS "60 minutes"
- Dow up 0.17 pct, S&P down 0.18 pct, Nasdaq drops 0.08 pct
Changes comment, adds details, updates prices
By Medha Singh
May 18 (Reuters) - Wall Street slipped on Friday, weighed down by financials and as Alphabet and Applied Materials led technology stocks lower, although losses were limited as industrial shares gained on signs of progress in Sino-U.S. trade talks.
China denied it had offered a package to slash the U.S. trade deficit by up to $200 billion, hours after it dropped an anti-dumping probe into U.S. sorghum imports in a conciliatory gesture as top negotiators meet in Washington.
A Chinese foreign ministry spokesman said the consultations were "constructive" as the world's two biggest economies are seeking to bridge a divide on trade issues.
"There is still a concern around trade talks with China, but ... the stock market is cautiously optimistic that trade talks will lead to a good result," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.
The industrial sector jumped 0.5 percent, the most among the 11 major S&P sectors, with Boeing's near 2 percent rise giving the biggest lift.
Also helping the industrials sector was Deere, which jumped 5.5 percent after the company raised its full-year earnings estimate.
Alphabet tumbled 0.8 percent, weighing the most on the Nasdaq. Google is set to be featured on CBS News' "60 minutes" this weekend.
Applied Materials dropped 8.4 percent after the chip gear maker's disappointing forecast renewed concerns over slowing smartphone demand.
The warning dragged down Philadelphia chipmaker index by 0.9 percent. Intel's 1.8 percent fall weighed on the market's three major indexes.
The financial index was off 0.44 percent.
At 11:21 a.m. EDT the Dow Jones Industrial Average was up 42.81 points, or 0.17 percent, at 24,756.79, kept afloat by Boeing and other industrial stocks.
The S&P 500 was down 1.80 points, or 0.07 percent, at 2,718.33 and the Nasdaq Composite was down 5.96 points, or 0.08 percent, at 7,376.51.
Campbell Soup fell 11.1 percent after the company cut its full-year profit forecast and said its chief executive officer decided to step down. Shares of a host of other food companies also declined.
Nordstrom declined 8.9 percent after the upscale department store operator reported same-store sales that missed analysts' expectations.
Advancing issues outnumbered decliners by a 1.03-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the Nasdaq.
The S&P index recorded 3 new 52-week highs and 4 new lows, while the Nasdaq recorded 119 new highs and 20 new lows.
(Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva)
UPDATE 7-Oil prices little changed but set for sixth week of gains - Reuters News
18-May-2018 11:08:44 PM
- Brent rose above $80 on Thursday
- Saudi Arabia makes assurances on supplies
- BP sees oil prices falling to $50-$65 a barrel - Dudley
- Coming up: Baker Hughes U.S. rig count data at 1 p.m. EDT
Updates prices, market activity, adds commentary; changes byline, dateline to NEW YORK, previously LONDON
By Stephanie Kelly
NEW YORK, May 18 (Reuters) - Brent oil prices were little changed on Friday but were on track for a sixth straight week of gains, boosted by strong demand, looming U.S. sanctions on Iran and plummeting Venezuelan production.
Brent crude futures for July delivery fell 6 cents to $79.24 a barrel, a 0.1 percent loss, by 10:58 a.m. EDT (1458 GMT). The benchmark on Thursday broke through $80 for the first time since November 2014.
U.S. West Texas Intermediate (WTI) crude futures for June delivery fell 19 cents to $71.30 a barrel, a 0.3 percent loss. The contract was still set for its third straight week of gains.
"Today is a bit of a pause and a retrenchment heading into the weekend with speculators trying to decide how close are we to the seasonal shift and do I take profits here," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.
British bank Barclays said it expected average prices of $70 per barrel for Brent this year and $65 a barrel for 2019, up from estimates of $63 and $60 previously.
"Since last month, Venezuela's production decline, (U.S. President Donald) Trump's Iran sanctions decision, a new disruption in Nigeria, and anecdotal evidence from a new round of producer earnings require a price forecast revision," the bank said.
Rising prices have already raised the alarm among big oil-consuming countries.
OPEC kingpin Saudi Arabia said on Thursday it would make sure the world is adequately supplied with oil just as major consumer India expressed frustration with rising prices.
Saudi Energy Minister Khalid al-Falih called India's Petroleum Minister Dharmendra Pradhan to assure him that supporting global economic growth was "one of the kingdom's key goals," the Saudi Energy Ministry said.
However, it will take time to assess whether oil prices remain volatile or not, Russia's energy minister, Alexander Novak, said.
Crude prices have received broad support from voluntary supply cuts led by the Organization of the Petroleum Exporting Countries.
Beyond OPEC's cuts, strong demand, falling output from Venezuela and the U.S. announcement this month that it would renew sanctions against OPEC member Iran have helped push up Brent by 20 percent since the start of the year.
U.S. investment bank Jefferies said sanctions against Iran could remove more than 1 million barrels per day (bpd) from the market.
Barclays said output from Venezuela could fall below 1 million bpd. The country, also an OPEC member, produced around 1.5 million bpd in April.
In the United States, crude production has continued to grow to record highs, rising 20,000 bpd to 10.72 million bpd last week, the Energy Information Administration said. The United States in February produced 10.3 million bpd, a record.
Market participants awaited U.S. rig count data that was due later on Friday at 1 p.m. EDT.
BP Plc, however, expects the rally to cool off. The oil major's chief executive, Bob Dudley, told Reuters he saw the price of oil falling to between $50 and $65 a barrel due to surging shale output and OPEC's capacity to boost production.
(Additional reporting by Ahmad Ghaddar in London and Henning Gloystein in Singapore; Editing by Dale Hudson and Jon Boyle)
PRECIOUS-Gold prices fall as dollar hits fresh peak; rebound seen - Reuters News
18-May-2018 10:08:32 PM
- Spot gold down over 2 pct for the week
- Dollar index hits fresh five-month high
- Benchmark U.S. yields near 7-year peak
(Updates prices)
By Eric Onstad
LONDON, May 18 (Reuters) - Gold prices dipped on Friday, weighed down by a firmer dollar, but some traders said signs pointed to a rebound.
Spot gold was down 0.1 percent at $1,288.41 per ounce at 1400 GMT, after hitting its lowest since Dec. 27 in the previous session at $1,285.41.
The metal was heading for its biggest weekly decline since early December.
U.S. gold futures for June delivery fell 0.2 percent to $1,287.50 per ounce.
"There are many drivers that are pointing to an upside in the precious metals, so we're buying into this weakness," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
The sentiment index in gold was indicating it was strongly oversold while the dollar was heavily overbought, while U.S. inflation measures were rising, he added.
Data on Thursday showed a tightening U.S. labour market and factory activity in the mid-Atlantic region picking up, bolstering expectations the Federal Reserve will raise interest rates next month.
"We think there is room for a strong rally into the summer and we have a gold target of $1,430 by August," Torlizzi said.
The dollar index rose to a fresh five-month peak on Friday as the benchmark U.S. Treasury yield hit the highest in nearly seven years.
"The 10-year U.S. yields put the dollar on a firm foot and put pressure on metals and gold," said a Hong Kong-based trader, adding that some "risk-on" sentiment in markets today was also adding pressure.
A stronger greenback makes dollar-denominated gold more expensive for users of other currencies, while higher U.S. yields dampen the appeal of non-yielding bullion.
The demands of populist parties likely to form Italy's next government, which promised on Friday to ramp up spending, could also support gold.
"A debt crisis in Italy would have a far bigger impact than one in Greece. Gold would profit as a result," Commerzbank analysts said in a note.
Spot gold is still targeting $1,302 per ounce as it has stabilised around a support at $1,287, Reuters technical analyst Wang Tao said.
In other metals, silver fell 0.2 percent to $16.39 an ounce and was due to shed slightly more than 1 percent for the week.
Platinum dropped 0.6 percent to $883.60 per ounce after hitting a five-month low at $879 on Thursday. Platinum was set to fall around 4 percent on the week, the biggest weekly loss since early December.
Palladium declined 0.3 percent to $977.47 and was heading for a 2 percent weekly loss.
(Additional reporting by Apeksha Nair in Bengaluru; Editing by Adrian Croft and Jon Boyle)
GRAINS-U.S. wheat futures rally; corn, soy firm on hopes for export deal - Reuters News
19-May-2018 12:40:32 AM
Recasts with U.S. trading, adds new analyst quote, changes byline/dateline; pvs LONDON
By Mark Weinraub
CHICAGO, May 18 (Reuters) - U.S. wheat futures rallied on Friday, with the benchmark Chicago Board of Trade soft red winter wheat contract surging 3 percent on forecasts for dry conditions that could further stress an already damaged crop.
The weather outlook also threatened to slow planting progress in the U.S. Midwest, which was supportive of corn and soybean futures.
"Heavy rainfall across portions of the northern U.S. Plains and the western Midwest will further delay spring plantings, while unfavorable dry anomalies persist in the southern U.S. Plains," Thomson Reuters Weather Research said in a note.
Corn futures were up 1.6 percent following China's move to drop its anti-dumping probe into imports of U.S. sorghum on Friday, beating a hasty retreat from a dispute that wreaked chaos across the global grain market and raised concerns about rising costs and financial damage at home.
The decision also boosted soybean futures amid hopes it signaled that a move to settle all ongoing trade disputes between Beijing and Washington would follow soon.
"The whole complex is being supported by the idea that China is showing some flexibility and talk of a potential grand bargain," said Jim Gerlach, president of Indiana-based A/C Trading.
Chinese Vice Premier Liu He is in Washington for talks aimed at resolving trade tensions between the world's two largest economies.
At 11:31 a.m. CDT (1631 GMT), CBOT July soft red winter wheat futures were up 15 cents at $5.12-1/2 a bushel. CBOT wheat has risen for four days in a row and was on track for a weekly gain of 3.1 percent.
CBOT July corn futures were 6-3/4 cents higher at $4.02.
CBOT July soybean futures were up 1/4 cent at $9.95-1/4 a bushel.
Strength in soybeans was tempered by a U.S. Agriculture Department announcement that unknown buyers canceled sales to buy 949,000 tonnes of soybeans.
Soybean futures have fallen 0.8 percent this week and were on track for their third straight weekly loss. Corn futures were up 1.4 percent this week.
(Additional reporting by Naveen Thukral in Singapore and Nigel Hunt in London; Editing by Dale Hudson and Tom Brown)
UPDATE 1-Farm bill fails in U.S. House over Republican immigration spat - Reuters News
19-May-2018 12:42:30 AM
Adds context for bill's failure
By Amanda Becker and Susan Cornwell
WASHINGTON, May 18 (Reuters) - The Republican-controlled U.S. House of Representatives failed to approve a sweeping $867 billion farm bill on Friday after conservative Republicans warned party leaders not to hold the vote until they were given the chance to consider a bill to clamp down on immigration.
The next steps are unclear for the bill, which failed in a 198-to-213 vote.
Representative Cathy McMorris Rodgers, a member of Republican leadership, told reporters "the Freedom Caucus" was the reason the bill failed.
The conservative Freedom Caucus has about 30 members in the 435-seat House and they have been pushing for consideration of a conservative immigration bill. The group told party leaders on Thursday that they should delay the farm bill vote until a debate is held on immigration.
Democrats also voted against the farm bill due to changes it would make to a food stamps program used by about 40 million Americans, officially known as the Supplemental Nutrition Assistance Program (SNAP).
Members of the Senate Committee on Agriculture, Nutrition and Forestry have said they are writing their own version of the farm bill because the House's proposed SNAP changes could not pass the chamber, where Republicans hold a slim 51-49 majority and passing most legislation requires 60 votes.
(Reporting By Amanda Becker
Editing by Chizu Nomiyama and Bill Berkrot)
FOREX-Dollar climbs to five-month peak as euro falls on Italy worries - Reuters News
18-May-2018 10:48:28 PM
- Euro struggles near $1.18 mark, as Italy woes grow
- Dollar rise leaves yen at weakest since January
Updates prices, adds comment, FX table, changes byline, dateline; previous LONDON
By Gertrude Chavez-Dreyfuss
NEW YORK, May 18 (Reuters) - The dollar rose to a five-month high against a basket of major currencies on Friday, helped by weakness in the euro as investors fretted about political uncertainty in Italy.
The dollar index has gained for five straight sessions and is on track for a 1.3 percent weekly gain. It has risen 5 percent since mid-February, with investors betting U.S. interest rates will need to rise further to curb inflation.
Shaun Osborne, chief FX strategist at Scotiabank in Toronto, however, believes the dollar's rally was more about extreme short positioning that needed to unwind.
"We continue to view dollar gains as a temporary issue reflecting excessive short positioning and concerns European growth momentum has slowed and may impair the ECB's (European Central Bank) willingness to move away from quantitative easing later this year."
The euro on Friday was headed for its fifth successive weekly decline versus the dollar, its first such fall since 2015.
Europe's single currency has fallen about seven cents in three weeks amid a sharp dollar rally and concerns about the outlook for Italy's next government.
The far-right League and 5-Star Movement have agreed on a governing accord that would slash taxes and ramp up welfare spending.
Ratings agency DBRS warned on Thursday that the economic proposals of the anti-establishment parties could threaten Italy's sovereign credit rating.
In mid-morning trading, the euro fell to a five-month low of $1.1753. It has declined nearly 1.2 percent versus the dollar this week and dropped against the Swiss franc, which typically attracts capital in times of uncertainty.
"The possibility of a eurosceptic government in Rome is shaking investor confidence ... at this point a larger fiscal deficit and greater bond issuance (in Italy) does seem likely," said David Madden, a strategist at CMC Markets.
A founding member of the EU and the euro, Italy accounts for 15.4 percent of eurozone GDP and the Italian parties' hostility toward the European Union is the biggest challenge to the bloc since Britain voted to leave two years ago.
A powerful rally by the dollar is also hurting the euro.
On Friday, the dollar set a fresh four-month high against the yen and was up 0.1 percent, buoyed by a further rise in U.S. Treasury yields that suggests an upbeat outlook for the world's largest economy.
In a note to clients, however, strategists at Citibank said the dollar rally would not last long. They cited the U.S. budget deficit, which is projected to balloon to more than $1 trillion in 2019, and would contribute to a 5 percent drop in the dollar index over the next 12 months.
