U.S. stock exchange traded funds (ETFs) pushed higher on Friday as encouraging economic signs overcame rising inflation data and disappointing technology results, but finished the week slightly down.
- Gold futures climbed Friday to close at a record $1,486 an ounce, up 0.8% for the week, with silver hitting its highest level in over three decades, as inflation concerns buoyed investment demand for the precious metals. “Gold prices remain supported on the back of its appeal as a hedge against inflation, amidst emerging inflationary concerns in the U.S., Europe and China,” analysts at ICICI Bank wrote in a note to clients. The day’s settlement price beat out the previous record close of $1,474.10 an ounce seen a week ago. Silver prices have rallied almost 38% year to date. They marked a gain of 4.8% for the week after closing last Friday at $40.61. “We view upside inflation risks as more likely than positive growth shocks in the U.S.,” analysts at Deutsche Bank wrote in a weekly report issued Friday. “This should mean that when the [Federal Reserve] eventually tightens monetary policy, it will not derail the rally in precious metals.” The SPDR Gold Shares ETF (NYSEArca: GLD) gained almost 1% on Friday.
- Oil rose on Friday, with Brent crude surging past $123 a barrel, as improving U.S. consumer confidence and industrial production eased concerns about rising fuel costs. Concerns about the impact of pricey fuel on the economic recovery and consumption hit prices earlier in the week, knocking Brent off 32-month highs. It had risen over $126 a barrel on expectations the conflict in Libya would lead to a prolonged disruption of the OPEC nation’s supplies. A U.S. government report showed underlying inflation pressures remained contained in March, while a survey showed April consumer sentiment rose more than expected. Investors have been concerned higher energy and food costs would slow consumer spending. Oil prices have “pushed ahead” of supply and demand fundamentals and near-term downside risk has risen after prices climbed to “exceptionally high levels,” Goldman told clients in the latest note, while it maintained its outlook for rising oil prices over a longer, 12-month horizon, on growing global fuel demand. The ProShares Ultra DB-UBS Crude Oil ETF (NYSEArca: UCO) surged almost 2% Friday.
- Technology shares had a difficult week as Google Inc. highlighted weaker trading in tech stocks Friday as the Internet giant’s shares fell 7% following first-quarter earnings that fell short of Wall Street estimates. Technology stocks also slipped on Thursday, as shares of Intel Corp., Hewlett-Packard Co. and Microsoft Corp. declined on news of a weakening personal-computer market. On Wednesday, both IDC and Gartner reported a decline in first-quarter PC shipments due to weaker consumer demand and the rise of tablets. Meanwhile, Barclays Capital lowered its fiscal third-quarter revenue target for Microsoft, saying the PC data “underscores persistent headwinds that Microsoft’s Windows business is likely to face in coming quarters, chiefly a maturing PC market but more ominously share erosion to new form factors such as tablets and smartphones.” The Technology Sector Select SPDR ETF (NYSEArca: XLK) ended flat on Friday.
Gregory A. Clay contributed to this article.
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