Stocks in the U.S finished mixed in volatile trading Friday, with major averages putting an end to two days of heavy losses triggered by Fed Chairman Ben Bernanke's comments that the central bank may scale back its asset purchases later this year.
The Dow Jones Industrial Average rose 41.08 points to close at 14,799.40, after plummeting more than 350 points in the previous session. The S&P500 edged up 4.24 points to end at 1,592.43, while the Nasdaq slid 7.39 points to finish at 3,357.25.
St. Louis Federal Reserve President James Bullard said the decision by the central bank to lay out its plans to taper its bond-buying program was badly timed and that the Fed should have waited for "more tangible signs" of economic improvement and a halt in the downward direction for inflation.
Asian shares stabilized Friday, led by a stellar rebound in Japan's benchmark Nikkei index, which crossed the 13,000 level to rally as much as 2 percent, notching up gains of over 4 percent on the week. Meanwhile, European shares closed at their lowest level since January.
In commodity markets, oil prices on Friday tumbled for the second straight day amid market fears about Federal Reserve plans to ease stimulus and signs of slowing growth in China. New York's main contract, West Texas Intermediate (WTI) light sweet crude for August, on Friday dropped $US1.45 in its first day of trade, closing at $US93.69 a barrel.
Brent North Sea crude for delivery in August lost $US1.24 at $US100.91 a barrel in London trade. Both contracts extended Thursday losses that were the largest since November as markets dived in reaction to Federal Reserve Chairman Ben Bernanke's signal on Wednesday that the Fed quantitative-easing (QE) stimulus may begin winding down by year-end.
Gold and silver futures pulled higher as investors who wagered on lower prices cashed in gains on the previous day's slump, and as a rebound in physical purchases buoyed prices. Gold for August delivery, the most actively traded contract, on Friday rose $US5.80, or 0.4 per cent, to settle at $US1,292 a troy ounce on the Comex division of the New York Mercantile Exchange.
Silver prices followed gold's cues, with the July contract climbing 13.6 US cents, or 0.7 per cent, to settle at $US19.959 a troy ounce on the Comex.
Copper closed higher on the London Metal Exchange (LME), boosted by some opportunistic buying after the previous day's slump and an improvement in investor sentiment after the People's Bank of China reportedly stepped in to ease the liquidity squeeze that has been plaguing the country's banking system. Short-term interest rates in China retreated from record highs amid speculation the central bank may be taking steps to ease the cash shortage that has been pressuring China's money markets in recent weeks.
At the PM kerb close on Friday, LME three-month copper was up 0.7 per cent at $US6,818 a metric tonne. Aluminium lagged the base metal complex on Friday, closing 0.3 per cent lower at $US1,793 a tonne.
The Australian dollar is slightly lower this morning as the US dollar continues to strengthen following last week's news that the US central bank may wind up its economic stimulus program.
In early trade, the local unit was buying 92.12 US cents, down from 92.34 cents on Friday.
There is no major economic data released in Australia today. In the US, Dallas Fed manufacturing index is released.