CMC Markets Weekly Report

Stocks in the U.S. erased their gains in the final hour of trading to finish narrowly mixed on Friday, as investors shrugged off earlier optimism over reports that Spain might request a bailout.

Stocks in the U.S. erased their gains in the final hour of trading to finish narrowly mixed on Friday, as investors shrugged off earlier optimism over reports that Spain might request a bailout.

The Dow Jones Industrial Average slipped 17.46 points, or 0.13 percent to close at 13,579.47. The S&P500 erased 0.11 points, or 0.01 percent to finish at 1,460.15 whilst the Nasdaq squeezed out a small gain of 4 points, or 0.13 percent, to end at 3,179.96.

European shares finished higher after the Financial Times reported that EU authorities are working behind the scenes to work out a new Spanish rescue program, which will be unveiled Thursday.

Meanwhile, German Finance Minister Wolfgang Schaeuble said that Spain did not need a sovereign bailout on top of the package already agreed for its banks, because it was on the right path to regain the confidence of markets.

The news from Spain had the euro a little stronger on Friday night, sending the US dollar index down slightly to 79.35. The Aussie has thus gained 0.2 percent to US$1.046 and gold rose US$4.30 to US$1773.00/oz.

Commodities were also a bit stronger on Friday, with base metals all up around 1 percent and oil, after its big plunge last week, also rebounding somewhat. Brent was up US$1.14 to US$111.59/bbl and West Texas was up US54c to US$92.96/bbl.

On the economic front it's a quiet week for Australia, the highlights being the RBA's Financial Stability Review due tomorrow and private sector credit on Friday.

It's a busier week in the US, featuring the Chicago national activity index tonight, followed tomorrow by consumer confidence, the Richmond Fed index and both the Case-Shiller and FHFA house price indices. On Wednesday, the last revision of the June quarter GDP will be made, the Fed will release its Beige Book, and new home sales will be noted. Thursday it's pending home sales and durable goods orders and Friday it's personal income and spending and the Chicago PMI.

China will also be the focus of attention this week as the Shanghai index continues to slide. The Chinese industrial profit results for August are released on Thursday.