Market wrap: Australian stocks face a flat start to the week after early gains for U.S. equities again evaporated by the closing bell on Friday.
The local June SPI futures contract closed two points lower at 4924 as futures traders found no clear direction for this morning's open.
Wall Street ended little changed for a second session but ahead for a fourth straight week, its longest winning run since August. The benchmark S&P 500 added 1 point or 0.07% on Friday, the Dow advanced 9 points or 0.08% for the day and 1% for the week, while the Nasdaq dropped 0.1%.
Consumer companies were the standout sector in the S&P 500 as confidence in the economy improves. The Commerce Department said incomes climbed faster than GDP in the fourth quarter, suggesting the economy has more momentum than growth estimates suggest.
"Investors are realising that the U.S. expansion is quite solid," the chief market strategist for JPMorgan Funds in New York told Bloomberg. "It will probably pick up pace rather than slow down from here."
The market was cheered by news of a European plan to bail out debt-laden Greece, but spooked later in the session by news that a South Korean navy vessel had sunk near the troubled border with North Korea.
Standard & Poor's reaffirmed its credit rating for Greece after euro-zone leaders agreed to offer coordinated loans and IMF assistance if require. The deal, brokered during a summit in Brussels, was declared "satisfactory" by the Greek Prime Minister.
"There is a sigh of relief that European officials are not committing joint suicide and have managed to take step away from the proverbial abyss," strategists at Brown Brothers Harriman told MarketWatch. "However, that sigh may not last very long."
The news boosted the euro, sending the U.S. dollar lower against major currencies and providing some relief for commodity prices after a torrid week. The dollar index, which measures the greenback against a trade-weighted basket of six currencies, fell 0.5%.
Precious metals offer a safe haven in times of trouble and the prospect of rising tensions in Korea saw prices recover Thursday's losses. Gold appeared to break an important support level on Thursday but the spot price closed back within the old trading range on Friday, up 1.5% or $15.70 at $1,106.70 an ounce. Silver and platinum also rebounded.
Demand concerns for oil outweighed the weak dollar. Crude futures closed 0.5% lower at $80 a barrel as traders focused on a larger-than-expected rise in U.S. inventories earlier in the week.
Industrial metals were mixed but mostly higher. Nickel hit a 21-month high and copper advanced as stocks continued to fall. In London, copper rallied 1%, lead 1.8% and nickel 3.6%, while tin lost 0.3%, zinc 0.7% and aluminium 0.1%.
The major European markets fell back as investors mulled the implications of the Greek bailout plan. Britain's FTSE lost 0.4%, Germany's DAX 0.2% and France's CAC 0.3%.
TRADING THEMES THIS WEEK
WINDOW DRESSING: Institutional investors measured on monthly returns have an interest in supporting the market until the end of March - Wednesday. This has been a month of steady gains and the institutions won't want to see too much of their hard-won advances evaporate. Thursday could be challenging for our market as traders close positions ahead of the four-day Easter break. The U.S. trades on Friday and job numbers are due.
NICKEL: This has been the pick of the base metals this year - prices are up around 34%. The stainless-steel-making ingredient hit its highest price since June 2008 on Friday as speculators piled into a breakout on evidence of tight supply and improving demand. The share prices of our nickel miners have not kept pace with the price of the metal, although currency movements may account for some of the difference.
ECONOMIC NEWS: This holiday-shortened week is quiet on the local front until Wednesday's retail sales and building approvals. The U.S. starts the week with tonight's personal spending, personal income and core price index. The big events come later in the week, climaxing with Friday's monthly jobs news.
