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Equities - Weekly outlook: July 1 - 5

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Investing.com - U.S. stocks ended the week lower on Friday as growing expectations that the Federal Reserve will soon begin to pull back monetary stimulus weighed on investor sentiment.

The Dow Jones industrial average was down 0.76% on Friday and ended the week 0.7% higher. The S&P 500 lost 0.43%, leaving it up 0.9% for the week. The Nasdaq edged up 0.04% on Friday to end the week 1.4% higher.

U.S. stocks finished the quarter with gains, with the Dow up 2.27%, the S&P 500 up 2.36% and the Nasdaq 4.15% higher.

Data on Friday showed that the University of Michigan's consumer sentiment index rose to 84.1 from a preliminary reading of 82.7 in June, nearing the almost six-year high reached in May.

Meanwhile, Fed Governor Jeremy Stein indicated that the bank may begin tapering its USD85 billion-a-month asset purchase program in September.

Stein said the decision to taper bond buying must be based on economic progress since the Fed implemented its easing program and should not be "excessively sensitive" to economic data releases in the weeks preceding the decision.

Investors had scaled back expectations that the Fed will start tapering bond purchases this year following a downward revision to U.S. first quarter growth on Wednesday.

The Commerce Department revised down first quarter growth to an annualized 1.8% from an initial estimate for 2.4% growth.

In Europe, the benchmark Stoxx Europe 600 was down 0.5% on Friday as uncertainty over U.S. monetary policy weighed.

Germany's DAX was down 0.39% at the close. France's CAC 40 was 0.62% lower, while Britain's FTSE 100 fell 0.45%.

Earlier Friday, official data showed that German retail sales rose more than expected in May.

In Asia, Japan's Nikkei rallied 3.03% on Friday, extending the previous session's steep gains on the back of a weaker yen, trimming the month's losses to 0.7%. Data on Friday showing that Japanese industrial output rose by a larger than forecast 2% in May added to the view that the economy is picking up.

China's Shanghai Composite Index rose 1.5% on Friday, it's first advance in eight days.

Gold rebounded on Friday ending the session up 1.85% at USD1,233.75 a troy ounce after falling to USD1180.35 a troy ounce in early trade, the lowest since August 2010. Despite Fridays rebound, gold prices dropped 11.18% in June and ended the quarter down 23%.

Elsewhere, oil prices ended lower for the first time in five days on Friday, on the back of a broadly stronger dollar, with contracts for August delivery settling at USD96.46 a barrel, down 0.6% for the day, but still up 2.65% for the week.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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