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May 31, 2013

Gold trading now is as heavy as it was at $1,900, von Greyerz says: GATA I THE GATA DISPATCH May 31, 2013.

Gold trading now is as heavy as it was at $1,900, von Greyerz says

5:50p ET Friday, May 31, 2013

Gold fund manager Egon von Greyerz today tells King World News that physical gold trading is as heavy now as it was when gold's price was $1,900. "We are seeing the same activity now as when gold was at its peak," von Greyerz says. "And it proves that all of the selling is in the paper market." An excerpt from his interview is posted at the King World News blog here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

The New York Times I Bits - The Business of Technology; May 31, 2013.

Daily Report
U.S. Says Self-Driving Cars Could Save Lives | The Transportation Department says that driverless cars should not yet be allowed, except for testing, but noted that some safety features could save lives, Claire Cain Miller and Matthew L. Wald report in The New York Times.
On Thursday, the department made its first formal policy statement on autonomous vehicles. In a nonbinding recommendation to the states, it said that driverless cars should not yet be allowed except for testing. But it said that semiautonomous features, like cars that keep themselves centered in lanes and adjust their speed based on the location of the car ahead, could save lives.
The statement, from the department's highway safety agency, comes as companies, led by Google, have made significant technological strides in making cars that drive themselves, but still face daunting legal, regulatory and cultural hurdles before the cars are widely available to drivers. It is the latest example of the tension between technological innovation and regulation, which move at very different speeds.
The statement detailed the benefits of self-driving and semiautonomous cars, which analysts said was a recognition by government officials that it had no choice but to keep up with the advancing technology in this area, which falls on a continuum from cruise control to full automation.
"It's not that they're trying to put the brakes on it," said Richard Wallace, director of transportation systems analysis at the Center for Automotive Research in Ann Arbor, Mich. "They're trying to get out in front of it." 
From The Times
Dell Begins Campaign to Support Leveraged Buyout | Dell began its official campaign to support a proposed $24.4 billion sale of itself to Michael S. Dell and the investment firm Silver Lake, and set July 18 as the date for a shareholder vote.
Roman Stanek, chief executive of GoodData, a business analytics company, says,
A Good Manager Must Be More Than a Messenger | Roman Stanek has started more than five companies and says he has the ability to see where technology is going.
Dots, a Highly Addictive Game, Passes 3 Million Players
Dots, a Highly Addictive Game, Passes 3 Million Players | Dots is addictive and very popular. More than three million people have downloaded the game since its debut in May, and now there's an updated version that increases the competitive ante.
Questions, and Opinions, About Flickr | Tips on downloading a photo, a complaint about the new presentation and other reader comments about the sudden changes to the online photo gallery Flickr.
Q&A: Choosing a Windows Tablet | Microsoft has two versions of Windows that can run on tablet computers, but Windows 8 is more generally versatile than the more mobile-oriented Windows RT.
Around the Web
HTC Said to Cancel Large Windows RT Tablet on Weak Demand | HTC Corp. has scrapped plans to introduce a full-sized tablet computer with Microsoft Corp.'s Windows RT operating system on concern it will meet with lackluster demand, according to people familiar with the matter. Bloomberg
Is that a new Nexus 7 in the Google Maps video? | A Google Maps video which went live just a few short days ago may provide our first glimpse at the next Nexus 7 tablet. You'll notice around the :50 mark that an unknown tablet makes a fleeting appearance. AndroidGuys

U.S. stocks end positive May with thud: MarketWatch I Wall Street at Close Report: May 31, 2013.

By Kate Gibson, MarketWatch 

NEW YORK (MarketWatch)U.S. stocks fell sharply Friday afternoon as Wall Street closed another month of gains with a whimper after mixed economic reports. 

“We’ve had a week of mediocre news for the United States; not a soft patch, not concerning, but certainly not inspiring,” said Jim Russell, senior equity strategist for U.S. Bank Wealth Management in Cincinnati. 

“We would like to see a quiet summer, where the market marks some time and consolidates some recent gains,” added Russell of Wall Street’s advance, which put the Dow Jones Industrial Average DJIA -1.36% ahead 1.9%, the S&P 500 index SPX -1.43% up 2.1%, and the Nasdaq Composite COMP -1.01% up 3.8% for the month. 

After rising 67.8 points, the Dow Jones Industrial Average DJIA -1.36% ended down 208.96 points, or 1.4%, at 15,115.57, its steepest drop since mid-April. The selloff accelerated late in the session:about 30 points of the Dow’s 209-point slide came in the last minute, FactSet data show.
Intel Corp. INTC +0.29% led gains that included just two of the blue-chip index’s 30 components. Intel’s gains came a day after Reuters reported Samsung Electronics had picked an Intel processor to power a new version of one of its tablets. 

The S&P 500 index SPX -1.43% declined 23.67 points, or 1.4%, to 1,630.74, with health care and energy hardest hit among its 10 industry groups. 

Financials have performed the best in May, followed by industrials and technology, with investors rotating in and out of sectors in search of bargains. 

“With interest rates being revalued, stocks are being revalued too. We haven’t seen the ‘great rotation’ (out of bonds and into stocks), but we are seeing rotation within the stock market itself,” said J.J. Kinahan, chief strategist at TD Ameritrade. 

The S&P 500 marked seventh monthly advance, its longest monthly winning streak since one ending in September 2009. The Dow industrials recorded their sixth straight monthly gain. 

“I think bulls would consider it a victory to come out of today with even a small loss. There has been so much pressure from Asia all week, and yet the S&P has hung in there,” said Kinahan. 

The U.S. dollar DXY +0.30% on Friday fell to a three-week low against the Japanese yen USDJPY -0.2570% , with the American currency notching an eighth straight month of gains versus the yen

Expectations of monetary easing moves by the Bank of Japan is expected to result in further softening of Japan’s currency. 

The Nasdaq Composite COMP -1.01% lost 35.38 points, or 1%, to 3,455.91. 

For every stock rising, more than five fell on the New York Stock Exchange, where more than 1.1 billion shares traded. 

Composite volume topped 3.9 billion. 

Equities had shed their losses and turned higher after the release of the Thomson Reuters/University of Michigan’s final index of consumer sentiment, which climbed to 84.5 for May, topping forecasts and hitting its highest level since 2007. 

“The consumer sentiment is very encouraging for the market overall; we had a quick bounce when that number came out,” said Kinahan at TD Ameritrade.

Next 24: Bernanke, ISM, Ford
Federal Reserve chairman Ben Bernanke and Fed vice chairman Janet Yellen speak this weekend. The market prepares for manufacturing data from China and the U.S. Laura Mandaro has a look at market-moving events to watch before Monday's open and in the week ahead. Photo: Getty Images. 

Next 24: Bernanke, ISM, Ford

Federal Reserve chairman Ben Bernanke and Fed vice chairman Janet Yellen speak this weekend. The market prepares for manufacturing data from China and the U.S. Laura Mandaro has a look at market-moving events to watch before Monday's open and in the week ahead. Photo: Getty Images.

Casting the largest chunk of the U.S. economy on uncertain footing, the Commerce Department on Friday reported household purchases declined 0.2% last month, following a 0.1% rise in March; incomes were static. 

Equity futures held their drop after the spending report. 

Separately, the Chicago PMI jjumped to 58.7 in May, its best reading in more than a year.
“The numbers paint the same picture we’ve seen for a while. The economy is growing, albeit we’d love 5% GDP, but the 2.5% GDP is a fine level; most CEOs say they can continue to make money,” said Kinahan. 

Dell Inc. DELL +0.64% rose 0.6% as founder Michael Dell, the computer maker’s board of directors and its private-equity partners faced a lawsuit by shareholders contesting Dell’s effort to take the company private. 

Dell on Friday urged shareholders to vote for the $24.4 billion buyout offer led by CEO Dell at a special meeting July 18, calling it better than other options. 

Among movers, Krispy Kreme Doughnuts Inc. KKD +21.46% climbed after the doughnut maker beat first-quarter profit and revenue estimates and raised its outlook for the year. 

U.S. stocks gained on Thursday as reports on economic growth and jobless claims heightened thinking that the Federal Reserve would continue its level of monthly bond purchases. 

The central bank’s monetary easing is a major factor in the bull market, now in its fourth year. 

Kate Gibson is a reporter for MarketWatch, based in New York.

Month-End Selloff: Stocks Drop 1%, Dow Tumbles 200 Points ... But Major Averages Higher for May: Wall Street at Close Report by CNBC; May 31, 2013.

By: Published: Friday, 31 May 2013 | 5:27 PM ET 

Stocks ended the month of May with big losses, with the Dow and S&P 500 posting their worst one-day drops since mid-April, but major averages still logged monthly gains.
Traders cited technical reasons for the sharp late-afternoon selloff in addition to month-end rebalancing and window dressing.

(Read More: The 'Hindenburg Omen': Bear Signal Scares Market)

"It almost feels as if this is the beginning of the correction—there are also some fears about the months of June," said Art Hogan, managing director at Lazard Capital Markets. "There's uncertainty over Japan, uncertainty over the pace of QE, and we've got investors that have already seen some healthy gains this year."

June is one of the worst months on average for the stock market, down an average of 0.1 percent.
(Read More: Stocks, Sectors to Watch in June)

U.S. Major Index Performance

Last Today's % Change 1 Week % Change MTD % Change YTD % Change
Dow 15,115.57 -1.36% -1.23% 1.86% 15.35%
S&P 500 1630.74 -1.43% -1.14% 2.08% 14.34%
NASDAQ 3455.91 -1.01% -0.09% 3.82% 14.45%
Russell 2000 984.15 -1.03% -0.01% 3.87% 15.87%
CBOE VIX 16.3 12.18% 16.51% 20.56% -9.54%

The Dow Jones Industrial Average tumbled 208.96 points, or 1.36 percent, to close at 15,115.57, dragged by Hewlett-Packard and Pfizer. This was the eighth session in a row where the blue-chip index traded in a triple-digit trading range.

The S&P 500 slumped 23.67 points, or 1.43 percent, to end at 1,630.74. And the Nasdaq fell 35.39 points, or 1.01 percent, to finish at 3,455.91.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, spiked above 16.

While all three major averages finished lower for the second-consecutive week, the Dow rallied 1.86 percent, the S&P 500 jumped 2.08 percent, and the Nasdaq soared 3.82 percent for the month of May, defying the traditional Wall Street slogan: "Sell in May and go away."

According to the trading adage, the market performs best in the six months from November through April, and worst in the period from May through October.
Is the Bond Sell-Off For Real? An asset class those entering their golden years depend upon is taking a hit. Doug Sandler, Riverfront Investment Group; Michael Schumacher, UBS; and CNBC's Rick Santelli, discuss. 
With the monthly gains, the Dow posted its sixth-consecutive month of gains and the S&P 500 and Nasdaq logged their seventh-straight month in positive territory. And so far in 2013, all three major averages have surged nearly 15 percent each. (Read More: Cramer: Here Are Two Stocks I Sold) For the month, cyclical sectors including financials, industrials and techs were the best performers, while defensive sectors utilities, telecoms, and consumer staples ended in the red. On the economic front, consumer sentiment hit its highest level in nearly six years in May, rising to 84.5 from 76.4 in April, according to the Thomson Reuters/University of Michigan's final reading on the overall index. And business activity in the Midwest rose in May, rebounding after a contraction in the month prior, according to the Institute for Supply Management-Chicago. But consumer spending fell 0.2 percent in April for the first time in almost a year, according to the Commerce Department, disappointing economists who had expected a gain of 0.1 percent. And inflation pressures remained subdued, rising just 0.7 percent in the last 12 months, the smallest increase since October 2009. The weak spending and the lack of inflation pressures could dampen market speculation the U.S. central bank might start scaling back monetary easing later this year. "All eyes remain on the U.S., analyzing every piece of data to establish if, and when, stimulus measures will be withdrawn—with every piece of bad news being actively welcomed by the market," wrote Rebecca O'Keeffe, head of investment at Interactive Investor. "This inverted logic is unsustainable in the long term, but for the moment, as the withdrawal of liquidity is perceived as being more painful than an economic slowdown, investors are happy to live in this bubble for as long as they can."  (Read More: Rising Yields May Stifle Boom in Dividend Stocks)
June Swoon Soon? Discussing what investors expect from June's market action, with Komal Sri-Kumar, Sri-Kumar Global Strategies and Sarat Sethi, Douglas C. Lane & Associates. 

Dell eked out a gain after news that a special committee recommended that shareholders approve the bid from founder Michael Dell and Silver Lake to take the computer maker private.

Among earnings, Lions Gate rallied after the entertainment company topped earnings expectations, thanks to its box-office success of "The Hunger Games" and the company's acquisition last year of independent studio Summit Entertainment.

Krispy Kreme zipped higher after the doughnut maker easily topped earnings expectations and also raised its full-year guidance.

Japan's Nikkei rebounded 1.4 percent, recovering some of the previous session's 5 percent slump. European markets finished in the red after data showed euro zone unemployment rose to a record 12.2 percent in April. Adding to woes, April retail sales in Germany were lower than expected.

Oil prices fell below $92 a barrel after OPEC said it would maintain its output target of 30 million barrels a day despite ample crude supplies. The automobile association expects the average gasoline price to continue to slide, and fall below $3.50 in June.

(Read More: Rising Oil Prices: The Euro Zone's Next Big Problem?)
—By CNBC's JeeYeon Park. Follow JeeYeon on Twitter: @JeeYeonParkCNBC

U.S. could raise interest rates before Canada: Central 1: BIV Today's Business News; May 31, 2013.

Mining and Energy

Province rejects Northern Gateway project in submission to National Energy Board

In its final written submission to the National Energy Board, the province has declined ... READ MORE

Economy and Finance


U.S. could raise interest rates before Canada: Central 1

A Vancouver economist says the U.S. Federal Reserve could raise interest rates before the Bank of Canada ... READ MORE

Asia Pacific


Canadians cautious about economic engagement with Asia: APF

Canadians acknowledge the importance of engaging economically with Asia but appear uneasy about acting on ... READ MORE

Human Resources


Vancouver leads the country in poor job posting numbers: Conference board

Vancouver employers were in no hurry to put out their ... READ MORE

More News...


Avigilon buys American security company in $17 million deal

More western shippers commit to green efforts

This Week's Issue


Local businessmen sound investment regulation alarm

Aspirations of newly created Venture Company Association part of the program at World Resource Investment Conference in Vancouver ... READ MORE

CMI Gold and Silver Spot prices as of close of trading in New York; May 31, 2013.

Spot Prices as of close of trading in New York
Friday, May 31, 2013

Updated 5/31/2013 Today Change Week Ago Month Ago Year Ago
GOLD $1,395.95 -$18.40 $1,389.15 $1,446.95 $1,562.10
SILVER $22.34 -$0.44 $22.58 $23.38 $27.81
PLATINUM $1,464.30 -$20.90 $1,455.20 $1,473.30 $1,420.40
PALLADIUM $752.80 -$7.90 $728.90 $687.10 $611.40

Best ETFs for the Rest of 2013, Jim Farrish: MoneyShow Investors Daily Alert; May 31, 2013


Jim Jubak on
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ADVFN III Evening Euro Markets Bulletin; May 31, 2013.

ADVFN III Evening Euro Markets Bulletin
Daily world financial news Friday, 31 May 2013

London Market Report
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Fed will not 'taper' in 2013, Barclays says

    Market Movers
    techMARK 2,513.02 -0.56%
    FTSE 100 6,583.09 -1.11%
    FTSE 250 14,350.92 -0.64%
London stocks finished the last trading day of the month in negative territory despite the release of mostly better than expected economic data Stateside in the afternoon.

The exception was the April personal consumption figures, which revealed the first drop in spending by Americans in a year. However, that report may have a ‘silver lining’ as the price index contained in the same – the so-called PCE price index - dropped to a 0.7% year-on-year rate of advance, versus 1.0% in the month before.

Economists at Barclays Research told clients that: “Overall, we view the slowing in consumer spending and GDP growth in Q2 13, and the soft inflation readings, as consistent with our view that the FOMC will not taper the pace of asset purchases this year, although that decision will likely depend most closely on upcoming labor market reports.”

On a more negative note, the Eurozone unemployment rate rose from 12.1% to a record 12.2% in April. That followed downwards revisions to Eurozone growth forecasts by the OECD earlier this week.

Also acting as a backdrop, there was a fair amount of speculation in markets on Friday regarding the risk that tomorrow’s Chinese manufacturing data could well come in below economists’ expectations.
FTSE 100: Investors still willing to bet on corporate debt
William Hill led gains on the benchmark after managing to get off a corporate bond sale to institutional investors to raise about £375m to help repay loans on acquisitions. That came despite the volatile conditions in debt markets of late.

UK banking group Lloyds also ended higher after selling a portfolio of US residential mortgage backed securities for £3.3bn as it continues to dispose of non-core assets to boost capital. The portfolio has a book value of £2.7bn so the bank will pocket a gain of £540m before tax on the sale which will be used for "general corporate purposes".

RBS bucked the trend to end the day with moderate gains.

Utilities stocks were on the up, rebounding after their recent falls. Severn Trent, National Grid and Centrica were in demand.

Engineering firm Smiths Group dropped despite an earlier stint in the blue, after confirming rumours that it has received a preliminary approach for its medical division. Market reports suggested that the unit could fetch at least £2.0bn.

Tour operator TUI Travel fell after committing to spend $6.1bn on 60 new aircraft with the option to acquire the same amount again at the same price.

B&Q owner Kingfisher was also in the red, pulling back after its strong rise yesterday following its first-quarter trading update. The recent wet weather in the UK led to profits coming in below estimates but Credit Suisse said yesterday that it doesn't see material risk to full-year forecasts.
FTSE 250: Lonmin and Halfords on the rise
Platinum miner Lonmin was an outperformer for much of the session as negotiations continued with labour unions in South Africa. The stock was given a boost by Morgan Stanley, which upgraded its rating from 'equal weight' to 'overweight', saying that the stock appears attractively valued versus peers.

Car and bike parts retailer Halfords was a strong riser on the FTSE 250 after UBS raised its recommendation for the stock by two notches from 'sell' to 'buy' and hiked its target from 280p to 375p. "Halfords is a brand with high market share in its core markets, good resonance with consumers, and finally is undertaking some of the investment required to succeed as a specialist retailer," the broker said.

AIM/Small Cap Report
FTSE 100 - Risers
William Hill (WMH) 442.70p +1.82%
Admiral Group (ADM) 1,338.00p +1.59%
Royal Bank of Scotland Group (RBS) 336.60p +1.54%
Centrica (CNA) 380.00p +1.06%
Whitbread (WTB) 2,883.00p +0.59%
Lloyds Banking Group (LLOY) 62.11p +0.50%
Hammerson (HMSO) 513.00p +0.39%
Wood Group (John) (WG.) 851.50p +0.29%
Shire Plc (SHP) 2,170.00p +0.28%
Tullow Oil (TLW) 1,045.00p +0.19%

FTSE 100 - Fallers
Evraz (EVR) 135.30p -4.92%
Eurasian Natural Resources Corp. (ENRC) 239.90p -4.76%
Capita (CPI) 962.00p -3.61%
Vedanta Resources (VED) 1,262.00p -3.37%
Experian (EXPN) 1,222.00p -3.25%
Legal & General Group (LGEN) 179.00p -3.19%
WPP (WPP) 1,128.00p -3.18%
Glencore Xstrata (GLEN) 323.10p -3.07%
Prudential (PRU) 1,117.00p -3.04%
Associated British Foods (ABF) 1,812.00p -2.74%

FTSE 250 - Risers
Halfords Group (HFD) 329.00p +6.13%
Oxford Instruments (OXIG) 1,683.00p +3.25%
Synthomer (SYNT) 204.50p +3.07%
Travis Perkins (TPK) 1,611.00p +2.81%
Lonmin (LMI) 295.00p +2.79%
Lancashire Holdings (LRE) 795.50p +2.71%
Direct Line Insurance Group (DLG) 212.00p +2.22%
BTG (BTG) 359.50p +1.99%
Keller Group (KLR) 948.00p +1.99%
Petropavlovsk (POG) 137.90p +1.85%

FTSE 250 - Fallers
Man Group (EMG) 115.50p -5.41%
Imagination Technologies Group (IMG) 351.40p -4.51%
Afren (AFR) 131.20p -4.23%
Mondi (MNDI) 871.50p -3.38%
Kazakhmys (KAZ) 327.50p -3.22%
Balfour Beatty (BBY) 233.10p -3.16%
Howden Joinery Group (HWDN) 234.20p -3.06%
Halma (HLMA) 517.00p -2.73%
Premier Oil (PMO) 359.90p -2.65%
Cobham (COB) 285.80p -2.59%

FTSE TechMARK - Risers
Promethean World (PRW) 16.38p +7.38%
Kofax (KFX) 330.00p +1.54%
Emblaze Ltd. (BLZ) 50.75p +1.50%
NCC Group (NCC) 110.00p +1.38%
E2V Technologies (E2V) 127.12p +1.09%
Innovation Group (TIG) 27.50p +0.92%
Phoenix IT Group (PNX) 152.38p +0.91%
Skyepharma (SKP) 50.00p +0.76%
BATM Advanced Communications Ltd. (BVC) 20.50p +0.61%
CML Microsystems (CML) 436.50p +0.34%

FTSE TechMARK - Fallers
RM (RM.) 68.75p -4.35%
Ark Therapeutics Group (AKT) 0.41p -3.53%
Antisoma (ASM) 1.68p -1.47%
Sepura (SEPU) 116.50p -1.27%
Ricardo (RCDO) 404.00p -1.22%
Optos (OPTS) 126.38p -0.88%
Xaar (XAR) 652.00p -0.15%
Triad Group (TRD) 6.50p 0.00%
Parity Group (PTY) 30.00p 0.00%
Torotrak (TRK) 30.12p 0.00%

Europe Market Report
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Eurozone battles rise in inflation and unemployment
FTSE-100: -0.92%
Dax-30: -0.48%
Cac-40: -0.80%
FTSE Mibtel: -0.45%
Ibex 35: -1.13%
Stoxx 600: -0.68%

European equities slipped into the red Friday as new data showed a rise in Eurozone inflation and unemployment.  The jobless rate in the region climbed to 12.2% in April from 12.1% in March, in line with analysts’ expectations, according to the European Union’s statistics office.

Inflation edged up in May to 1.4% from last month’s 1.2%, meeting forecasts. It was fuelled by rising prices for food and services, a separate report showed.

The euro-area inflation rate has been below the European Central Bank’s (ECB) 2.0% target since February.

"We’re engaged in a race against time, and in too many countries, too many people without a job - in particular young people - remind us that the battle is not yet won, and further efforts are needed," European Union, President Herman Van Rompuy, said this week.

The ECB had been under mounting pressure to spur recovery as the economy contracted 0.2% in the first three months of the year. The economy is forecast to stagnate in the second quarter before returning to growth.

The central bank this month lowered its interest rate to a record low of 0.5% to cushion the blow.
Consumer weakness in Germany and France
Germany and France continued to show signs of consumer weakness, according to data Friday.

The German statistics office reported an unexpected drop in retail sales during the month of April by -0.4%, following a revised -0.1% month-on-month reading in March. It missed the consensus for a 0.2% rise.

In France, consumer spending fell 0.3% in April, following a 1.3% gain the prior month. Analysts, however, expected a contraction of 0.6%.
Roche and Telecom Italia slide
Shares in Roche Holding retreated after its flu medicine Tamiflu failed to show additional benefits when given in a larger dose.

Telecom Italia dropped after UBS recommended a ‘sell’ rating, saying the carrier’s decision to retain the active component of its copper network may complicate the regulatory review.

Salzgitter slumped after Nomura Holdings downgraded its rating to ‘reduce’ from ‘neutral’. Royal Bank of Scotland rallied after narrowing its shortlist of prospective bidders in its sale of 315 branches.
Crude futures tumble
Front month Brent crude futures dropped $1.038 to $101.140 per barrel on the ICE.  The euro/dollar climbed 0.40% to the 1.0338 dollar mark.

US Market Report
Upbeat Economic Data Leads To Modest Strength On Wall Street

Stocks have moved modestly higher over the course of the trading day on Friday, adding to the gains posted in the previous session. The markets have benefited from a positive reaction to some upbeat economic data, although buying interest has remained relatively subdued.

The major averages have pulled back off their highs for the session in recent trading but are holding on to slim gains. The Dow is up 32.21 points or 0.2 percent at 15,356.74, the Nasdaq is up 5.79 points or 0.2 percent at 3,497.09 and the S&P 500 is up 1.13 points or 0.1 percent at 1,655.54.

The modest strength on Wall Street comes on the heels of the release of better than expected reports on Chicago-area business activity and U.S. consumer sentiment.

Not long after the open, the ISM Chicago released a report showing that its Chicago business barometer surged up to 58.7 in May from 49.0 in April, with a reading above 50 indicating an increase in business activity. Economists had been expecting the barometer to edge up to 50.0.

With the much bigger than expected increase, the Chicago business barometer reached its highest level since March of 2012 after hitting a three-and-a-half-year low in April.

Thomson Reuters and the University of Michigan released a separate report showing that consumer sentiment improved by even more than previously estimated in the month of May

The report showed that the consumer sentiment index for May was upwardly revised to 84.5 from the preliminary reading of 83.7. Economists had expected the index to be unrevised. The index is now well above the final April reading of 76.4 and at its highest level since July of 2007.

The upbeat data overshadowed a separate report from the Commerce Department showing an unexpected drop in personal spending in the month of April.

Nonetheless, buying interest has remained subdued, as traders worry that the better than expected data may lead the Federal Reserve to scale back its asset purchase program.

Sector News

While many of the major sectors continue to show only modest moves, considerable strength has emerged among healthcare provider stocks. The Morgan Stanley Healthcare Provider Index has advanced by 1.6 percent, reaching a new record intraday high.

Health Management Associates (HMA) and Community Health Systems (CYH) are turning in two of the healthcare provider sector's best performances, jumping by 6.7 percent and 5.9 percent, respectively.

Utilities, railroads and electronic storage stocks are also seeing some strength in mid-day trading, although buying interest has remained subdued.

Meanwhile, gold stocks have come under pressure on the day, dragging the NYSE Arca Gold Bugs Index down by 1.5 percent. The weakness among gold stocks comes as gold for August delivery is sliding $20.60 to $1,391.40 an ounce.

Steel, pharmaceutical and oil service stocks have also moved to the downside on the day, partly offsetting the strength seen in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. While Japan's Nikkei 225 Index surged up by 1.4 percent following yesterday's sell-off, Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets all moved to the downside on the day. The German DAX Index dropped by 0.6 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index slid by 1.1 percent and 1.2 percent, respectively.

In the bond market, treasuries have come under pressure after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.3 basis points at 2.157 percent.

Broker Tips
Wolseley, Halfords, Lonmin

Panmure Gordon recommends investors to take profits at heading and plumbing products group Wolseley ahead of its third-quarter results on June 4th.

Analyst Andy Brown said: "As US housing data, on balance, continues to improve, investors seem happy […]. We believe that the valuation is up with events and uncertainty surrounding its European operations is more likely to cause a negative surprise."

Car and bike parts retailer Halfords was a strong riser on the FTSE 250 on Friday after UBS upgraded its rating for the stock by two notches from 'sell' to 'buy' and hiked its target from 280p to 375p.

"Halfords is a brand with high market share in its core markets, good resonance with consumers, and finally is undertaking some of the investment required to succeed as a specialist retailer. The level of opex and capex investment required, in addition to the dividend cut, came as a surprise, but we consider that this will put Halfords on a path to sustainable earnings growth in the medium term."

Morgan Stanley has raised its recommendation for platinum miner Lonmin from 'equal weight' to 'overweight', saying that the stock appears attractively valued versus peers.

"We consider Lonmin an attractive geared play on recovery, offering volume/unit cost improvement into a strengthening metal price. Whilst the macro remains the most important driver of the share price in the near term we contend that Lonmin can continue to close this valuation gap as it delivers ongoing volume/cost improvements in line with the trends identified above

European stocks drop for second week, off 0.8%: MarketWatch I European Markets at Close Report; May 31, 2013.

By Sara Sjolin, MarketWatch
LONDON (MarketWatch) European stock markets moved deep into the red on Friday, with investors taking some profits on the final day of the month, while remaining worried about the future of the Federal Reserve’s stimulus program. 

The Stoxx Europe 600 index XX:SXXP -0.88%  fell 0.9% to 300.88, closing out the week 0.8% lower.

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The benchmark, however, climbed for a 12th straight month, up 1.4%, as aggressive easing measures from central banks globally largely offset worries about sluggish growth. This week, most European index fluctuated between gains and losses, after the U.S. Fed last week spurred uncertainty to whether it will begin to taper its bond-buying program in coming months. 

“We’ve seen a lot of money shifting from one place to the other,” said Max Cohen, financial sales trader at Spreadex. 

“Today we’re seeing a combination of things. There’s some profit-taking ahead of the next month, and people are cautious with taking on new positions because they don’t know what to expect [from the Fed],” he added. 

Among notable decliners in the pan-European index on Friday, shares of Salzgitter PLC DE:SZG -3.47%  dropped 5.2% after Nomura cut the steelmaker to reduce from neutral. 

On a more upbeat note, shares of PostNL NV NL:PNL +6.85% jumped 6.9% after the freight firm lifted its 2013 outlook to reflect tariff increases, which will be implemented in August.

Mixed U.S. data

U.S. data were also among the main focus points, with investors trying to gauge it they were strong enough to trigger the Fed to scale back its stimulus program. Fed Chairman Ben Bernanke said last week that the central bank may start reducing its bond buys in coming months if data continue to improve, raising fears that the $85-billion-a-month liquidity injection will soon come to an end.

The data out on Friday were mixed. Consumer-spending figures showed a 0.2% drop in April, worse than the 0.1% decline expected by analysts. Personal income slipped less than 0.1% after a revised 0.3% gain in March. 

Meanwhile, a gauge of consumer sentiment reached the highest level since 2007 in May, helped higher by a more encouraging outlook on current economic conditions. 

Cohen from Spreadex said the data weren’t “significant enough in size or importance to move the Fed or the market”, because most people were looking ahead to the monthly release of nonfarm-payroll numbers next Friday. 

Economists polled by MarketWatch expect to see 175,000 jobs added to the U.S. economy for the month of May. A number above expectations might hurt stocks, as it would strengthen the case for the Fed to slow down asset purchases. 

“This inverted logic is unsustainable in the long term, but for the moment as the withdrawal of liquidity is perceived as being more painful than an economic slowdown, investors are happy to live in this bubble for as long as they can,” said Rebecca O’Keeffe, head of investment at Interactive Investor, in a note. 

Euro-zone data

Data out of the euro zone showed unemployment rose to 12.2% in April, marking a euro-era high and up from 12.1% in the previous month. 

“The surveys suggest that the labor market may deteriorate further over the next few months, and the only positive is that the pace of deterioration may avoid any further intensification,” said James Ashley, senior European economist at RBC Capital Markets, in a note. 

“That is consistent with our view that the euro area unemployment rate is likely to creep up to at least 12.5% before peaking in the current cycle,” he added. 

Weak euro-zone data have added more pressure on the European Central Bank to launch additional stimulus measures when it meets for its monthly policy-setting meeting next week. The central bank lowered the key interest rate by 0.25 percentage points at the latest meeting to a record low 0.5% and most analysts expect it to keep rates unchanged when it meets in June. 

Analysts at Royal Bank of Scotland on Friday suggested the bank super sizes its stimulus measures by launching another round of long-term refinancing operations (LTRO) with extra long maturity and at extra low costs. 

Data out of Germany showed retail sales dropped 0.4% in April, missing expectations of a 0.4% improvement. 

The DAX 30 index DX:DAX -0.61%  slid 0.6% to 8,348.84, but gained 0.5% on the week. For the month, the benchmark jumped 5.5%, the largest monthly percentage rise since July last year. 

Shares of Linde AG DE:LIN -1.51%  shaved off 0.7% after J.P. Morgan Cazenove cut the chemicals firm to neutral from overweight. 

France’s CAC 40 index FR:PX1 -1.19%  erased 1.2% to 3,948.59 and posted a 0.2% weekly loss. The index gained 2.4% on the month 

The U.K.’s FTSE 100 index UK:UKX -1.11%  closed 1.1% lower at 6,583.09, sending it to a 1.1% loss for the week. For May, the index gained 2.4%. 

Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.