June 30 New York

The DJIA rose by 62.60 points to 21349.63 while the S&P 500 Index gained by 3.71 points to 2423.41.  The DJIA added 0.29 percent and ended the quarter up 3.3 percent.  The S&P 500 Index ended up 0.15 percent, following Thursday’s 0.86 percent decline.  The gauge gained 2.6 percent in the quarter.  The Nasdaq Composite Index fell by 3.931 points to 6140.420 while the Nasdaq 100 Index retreated by 6.103 points to 5646.918.  The Nasdaq Composite Index declined 0.6 percent and posted a 3.9 percent increase in the quarter.  The yield on 10-year Treasuries rose 3.7 basis points to 2.304 percent.  The rate climbed 16.7 basis points this week.  The U.S. dollar strengthened against the yen by 0.21 yen to 112.39.  WTI crude futures rose 2.47 percent to $46.04 a barrel.  WTI futures were up 5.77 percent this week.  U.S. stocks closed up Friday buoyed by increase in the industrial and consumer discretionary sectors, while European shares reversed earlier gains and turned lower.  Oil continued to climb as concerns about an oversupply faded.  Volatility is making a comeback – though still low by historical standards – as the debate on normalizing central bank policy intensifies after nine years of unprecedented stimulus.  That suggests some investors are growing concerned about the economy’s ability to withstand a tightening cycle even as data Friday showed U.S. consumer spending rose in line with economists’ estimates in May.  Technology stocks have been under pressure this week, while banks have been supported on the prospect for higher rates.  Oil posted the longest run of gains in six months after U.S. shale explorers paused a record drilling expansion in a sign the boom may be slowing down.  Futures added as much as 2.7 percent in New York, advancing for a seventh session. Shale explorers broke the longest stretch of uninterrupted growth in three decades as rigs targeting crude fell by 2 this week, bringing total to 756, according to Baker Hughes Inc. data reported Friday.  The rig count has more than doubled from a low of 316 in May.  While prices have surged this week, oil in New York and London are still set for a loss in June – a month in which prices typically gain.  Crude futures tumbled into a bear market last week on concerns that rising global supply is offsetting cuts from the OPEC and its partners.  WTI crude futures for August delivery gained $1.11 to settle at $46.04 on the New York Mercantile Exchange.  Oil is down about 9 percent this quarter.  Bank of America lowered its 2017 WTI forecast to $47 and 2018 to $50, citing a continuing rise in oil output and disappointing demand.

Kazuhide Matsuishi

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