Stocks Cap Final Session of Week with Gains…..

U.S. equities finished out a bumpy week on an upnote, but snapped a two-week winning streak, as investors weighed a ramp up in Q1 earnings season and continued uncertainty surrounding the timing and implications of the reopening of the U.S. economy. Moreover, Congress passed another bill this week to aid small businesses and the healthcare system to combat the severe disruption from the COVID-19 (coronavirus) pandemic. However, the economic calendar continued to provide more dismal data to keep sentiment in check, as U.S. consumer sentiment fell to lows not seen since 2011 and durable goods orders dropped more than expected, even though the internal components of the report were not as bad as feared. On the earnings front, Dow member Intel topped quarterly forecasts but withdrew its annual revenue guidance, while fellow Dow components American Express and Verizon Communications offered mixed results. Treasury yields finished slightly lower amid an uptick in bond prices, as did the U.S. dollar, while gold lost ground and crude oil prices were higher. Markets in Europe and Asia finished mostly lower.

The Dow Jones Industrial Average rose 260 points (1.1%) to 23,775, the S&P 500 Index increased 39 points (1.4%) to 2,837 and the Nasdaq Composite advanced 140 points (1.7%) to 8,635. In moderately heavy volume, 1.1 billion shares were traded on the NYSE and 3.6 billion shares changed hands on the NASDAQ. WTI crude oil gained $0.44 to $16.94 per barrel and wholesale gasoline added $0.02 to $0.70 per gallon. Elsewhere, the Bloomberg gold spot price was $5.32 lower at $1,725.19 per ounce, while the Dollar Index—a comparison of the U.S. dollar to six major world currencies—lost 0.1% to 100.30. Markets were lower for the week, as the DJIA declined 1.9%, the S&P 500 fell 1.3% and the Nasdaq Composite shed 0.2%.

The April final University of Michigan Consumer Sentiment Index was revised higher to 71.8, versus expectations for a downward adjustment to 68.0 from the preliminary 71.0 reading, but below March’s 89.1 level. The index posted a record monthly decline and sits at the lowest level since late 2011 as the current conditions component of the survey fell sharply and the expectations portion declined solidly. The 1-year inflation forecast dipped to 2.1% from March’s 2.2% rate, but the 5-10 year inflation forecast rose to 2.5% from the prior month’s 2.3% pace.

March preliminary durable goods orders fell 14.4% month-over-month (m/m), versus the Bloomberg estimate of a 12.0% fall and compared to February’s downwardly-revised 1.1% gain. The headline rate drop was fueled by the impact of the turmoil in the energy sector on the manufacturing sector and the decisive drop in canceled orders for Boeing aircraft. Ex-transportation, orders declined 0.2% m/m, versus forecasts of a 6.5% decrease and versus February’s negatively-adjusted 0.7% gain. Moreover, orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, ticked 0.1% higher, compared to projections of a 6.7% decrease, while the prior month’s figure was revised higher to a 0.8% decline.

Treasuries were slightly higher, as the yield on the 2-year note ticked 1 basis point (bp) lower to 0.21%, the yield on the 10-year note declined 2 bps to 0.59% and the 30-year bond rate lost 4 bps to 1.16%.

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