CMC Markets Weekly Report

Stocks in the U.S. recovered from their lows but still finished slightly lower Friday, breaking a four-day winning streak. Weighed by a batch of disappointing economic reports and a day after the Dow and S&P 500 posted record highs.

Stocks in the U.S. recovered from their lows but still finished slightly lower Friday, breaking a four-day winning streak. Weighed by a batch of disappointing economic reports and a day after the Dow and S&P 500 posted record highs.

The Dow Jones Industrial Average finished down less than a point to close at 14,865,06, after being down nearly 75 points at its session low. The S&P500 slipped 4.52 points to end at 1,588.85 and the Nasdaq dipped 5.21 points to finish at 3,294.95.

On the economic front, retail sales unexpected contracted 0.4 percent in March, according to the Commerce Department, disappointing analysts who had expected a flat reading for the month.

Adding to woes, consumer sentiment tumbled to a nine-month low in April, with The Thomson Reuters/University of Michigan's preliminary reading on the overall index of consumer sentiment falling to 72.3. Economists expected a reading of 78.5. The index stood at 78.6 last month.

Business inventories edged up just 0.1 percent in February, the weakest gain since June, according to the Commerce Department, missing expectations for an increase of 0.4 percent.

Meanwhile, producer prices recorded their biggest drop in 10 months, falling 0.6 percent in March as the cost of gasoline tumbled, according to the Labor Department, giving further reason for the Federal Reserve to maintain its accommodative monetary policy. Economists surveyed by Reuters expected a decline of 0.2 percent.

Energy stocks tumbled as commodities staged a broad selloff. Gold prices plunged to settle near $1,500 an ounce, dropping more than 20 percent from its record 2011 highs and putting it in bear market territory for the first time after 12 years of gains. Meanwhile, oil prices slumped to an eight-month low. New York�s main contract, West Texas Intermediate (WTI) crude for May delivery, fell $US2.22 to settle at $91.29 a barrel. In London, Brent North Sea crude for delivery in May finished at $US103.11, down $US1.16.

Base metals closed sharply lower on the London Metal Exchange on Friday, tumbling alongside wider markets after a disappointing batch of U.S. economic data eroded investor sentiment.

Flagship three-month copper closed 2.7 percent lower at $US7,406.50 a metric ton on Friday. Tin - which is more volatile than the rest of the complex, due to its relatively low trading volumes - was down 3.7 per cent at $US22,005/ton at the PM kerb close.

Since base metals are used widely in industry, demand expectations are closely aligned to signs of economic growth.

In Europe, investors were cautious ahead of a two-day meeting between European Union finance ministers, at which Cyprus's 10 billion euro ($13 billion) bailout will be top of the agenda. The cost of Cyprus's bailout has ballooned and there are fears the aid promised to the country will be insufficient to help the Mediterranean country through a steep recession.

In the week ahead, the U.S. will see an array of earnings report from Dow components Coca-Cola, intel, Johnson & Johnson, American Express, Bank of America, Google, General Electric and McDonald�s.

Data wise, the U.S. will see the Empire State manufacturing index and housing market sentiment index tonight, the CPI, housing starts and industrial production on Tuesday, the Fed Beige on Wednesday and the Philadelphia manufacturing index on Thursday.

In China, retail sales, industrial production, fixed asset investment numbers, but all eyes will be on the March quarter GDP.

In Australia, it�s housing finance and investment lending today, vehicle sales and the minutes of the April RBA meeting on Tuesday, the Westpac lending index on Wednesday and NAB�s March quarter business confidence summary on Thursday.

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