CMC Markets Weekly Report

Stocks finished in negative territory on Friday, with the Dow snapping a 10-day win streak and the S&P 500 ending shy of its record closing level, following a disappointing consumer sentiment report and investors started to question whether the recent rally has run out of steam.

Stocks finished in negative territory on Friday, with the Dow snapping a 10-day win streak and the S&P 500 ending shy of its record closing level, following a disappointing consumer sentiment report and investors started to question whether the recent rally has run out of steam.

The Dow Jones Industrial Average slid 25.03 points to close at 14,514.11. The S&P500 erased 2.51 points to end at 1,560.72, whilst the Nasdaq declined 9.86 points to finish at 3,249.07.

On the economic front, consumer sentiment dropped 71.8 in early March, tumbling to its lowest levels since December 2011, according to the Thomson Reuters/University of Michigan's preliminary reading. Economists expected a reading of 78.

Consumer prices recorded their largest increase in nearly four years in February, but details of the report on Friday showed no sign of a pickup in inflation to trouble the Federal Reserve.

Investors also kept an eye on Washington where President Barack Obama seemed no closer to striking a deal on deficit reduction after a long session on Capitol Hill.

Meanwhile, European shares ended lower as finance ministers in Europe geared up for a late night of talks aimed at thrashing out a bailout program for troubled Cyprus. A potential run on Cypriote banks has been sparked by the decision at a meeting of Eurozone finance ministers on Friday night in Europe to provide the tiny economy with an E10bn bailout on the condition that all Cypriote deposits are levied 6-10%.

The euro fell over 1 percent against the U.S dollar in early trade this morning and the Aussie fell half a cent to US$1.035. The Aussie closed up 0.4 percent to over US$1.040 on Friday before the Eurozone announcement.

In commodity news, base metals fell on Friday night by 0.5 -1.5 percent. Gold was flat at US$1592.00/oz and oil was up on the weaker dollar. Brent up US86c to US$108.96/bbl and West Texas oil was up US47c to US$93.45/bbl.

In the week ahead, Australia can expect vehicle sales and the minutes from the RBA meeting on Tuesday. On Wednesday it�s Westpac�s leading economic index along with a quarterly housing measure from CBA.

Thursday will also see the expiry of March quarter index futures and options on the ASX.

The U.S will see another round of U.S housing data rolled out this week, beginning tonight with the housing sentiment index. Tuesday its housing starts and Thursday we can expect existing home sales, FHFA house price index, the Philadelphia Fed manufacturing index and a flash measure of the March PMI rounds off the week.

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