Exchange traded funds (ETFs) ended the first day of the second quarter with moderate gains, helped by optimism over U.S. job growth, though some caution ahead of the weekend knocked the major indexes from session highs.

  • Builders started work on fewer homes, apartments and government projects in February, pushing construction activity down to the lowest level in more than a decade. Construction spending tumbled for a third straight month, dropping 1.4 percent in February, the Commerce Department said Friday. The weakness pushed total activity down to a seasonally adjusted annual rate of $760.6 billion, the smallest total since October 1999. That was below the previous recession low set back in August. Activity at the February level is about half the $1.5 trillion pace that economists believe would signal a healthy construction sector. They think it could take up to four years for construction to fully recover from the bursting of a housing bubble that pushed the country into a deep recession. Despite the construction data, the Industrial Select Sector SPDR (NYSEArca: XLI) ended .8% higher Friday.
  • Oil prices hit a new 30-month high on Friday after the world’s top two oil consumers, the U.S. and China, issued positive economic reports that pointed to increased demand. Crude-oil futures settled just pennies short of $108 a barrel Friday, after U.S. jobs data came in better than expected and as reports of anti-government forces losing ground in Libya added to the uncertainty surrounding oil supplies. Light, sweet crude for May delivery gained $1.22, or 1.1%, to $107.94 a barrel on the New York Mercantile Exchange. That’s the highest settlement for oil since Sept. 25, when oil futures settled at $108.05 a barrel. “Oil prices are higher because the market is picking up the sense that momentum is shifting against the rebels in Libya. Three small towns have apparently fallen in the last 24 hours in what must be a disappointing turn of events for the coalition,” analysts at MF Global said in a research note late Thursday. The United States Oil ETF (NYSEArca: USO) rose 1.3% on Friday.
  • Gold futures settled lower Friday, a day after ending at a record high. Gold futures for June delivery lost $11, or 0.8%, to $1,428.90 an ounce on the Comex division of the New York Mercantile Exchange. Gold ended at a record of $1,439.90 Thursday, which helped put weekly gains at 0.2%. Hawkish comments by Fed officials — however tempered by remarks from William Dudley, president of the Federal Reserve Bank of New York — worked to take the wind out of gold’s sails. “People are certainly concerned about what the Fed is going to do,” said Walter de Wet, an analyst with Standard Bank in London. Any talk about the end of monetary easing “is going to be perceived negatively for gold.” The SPDR Gold Shares ETF (NYSEArca: GLD) closed down 0.5% today.
  • Treasury prices turned higher Friday, pushing short-term yields down from their highest level since May, as fresh comments from a Federal Reserve policy maker stood in contrast to recent statements by other Fed officials leaning toward reversing the central bank’s easy monetary policy. The market reversed after William Dudley, president of the Federal Reserve Bank of New York and considered one of the more centrist and influential voices on the Fed’s policy-setting committee, said the firming of economic activity “is welcome and not a reason to reverse course.” “Dudley is trying to splash a little cold water on what the hawks have been saying,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets. “His comments carry much more weight.” Bonds had lost ground after the Labor Department reported earlier in the day that the U.S. unemployment rate fell to 8.8%, compared with a forecast of 9% and last month’s rate of 8.9%. The iShares Barclay 7-10 Year Treasury ETF (NYSEArca: IEF) ended the day with a slight gain.

Gregory A. Clay contributed to this article

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