Market Wrap for Friday, April 12: Stocks Record Modest Losses; Treasuries Surge and Precious Metals Plunge

Although the U.S. stock market shook off worse than expected retail sales data, volatility hit other markets hard to end the week.

Precious metals were slammed on the retail sales data along with some signs of deflationary pressures in Friday's economic data. Technical levels were broken to the downside during the sell-off, which exacerbated the losses in precious metals.

Treasuries also surged on the day, which may be a sign that investors are preparing for a sell-off in stocks despite the Dow and S&P holding near record highs. All of the major averages closed lower on the day, but the losses were minor and the Dow was basically flat.

Major Averages

The Dow Jones Industrial Average closed the day unchanged at 14,865.

The S&P 500 lost around 4.5 points, or 0.28 percent, to 1,589.

The Nasdaq Composite fell 5 points, or 0.16 percent, to 3,295.

Retail Sales

Retail sales fell 0.4 percent in March after increasing 1.0 percent in February. This was worse than consensus expectations which expected retail sales to be flat.

Excluding the auto sector, retail sales also fell 0.4 percent versus a 1 percent increase in February.

PPI

Producer prices declined more than expected for March after rising 0.7 percent in February. The data showed that PPI declined 0.6 percent last month, which was more than the consensus estimate which called for a decline of 0.1 percent.

Core PPI, which excludes volatile food and energy costs, rose 0.2 percent compared to consensus estimates which called for an increase of 0.1 percent.

University of Michigan Consumer Sentiment

The University of Michigan Consumer Sentiment Index fell 72.3 for the preliminary April reading. This compares to a reading of 78.6 for April and consensus expectations which called for a decline to 78.0.

Business Inventories

Business inventories rose 0.1 percent for the month of February after increasing by 0.9 percent in January. This was less than consensus estimates which expected an increase of 0.4 percent.

Commodities

Crude oil fell again on Friday. Near the close of trading, NYMEX crude futures, the U.S. benchmark, were down around 2.50 percent to $91.16. Brent crude contracts lost a little better than 1 percent and were last trading at $103.05.

Precious metals were crushed on the session as technical levels were broken to the downside. Gold futures plunged to their lowest level since 2011, notching a loss of around 5 percent to $1,486.30. Silver lost almost 6 percent and was trading at $26.05 near the close. Copper futures were last trading down around 2.66 percent on Friday.

The entire grain sector was higher on the day with the exception of soybean oil. Corn futures had rallied around 1.22 percent at last check while wheat was up roughly 2.30 percent. Movers in soft commodities included cocoa, which added 1 percent, and coffee, which was last trading down around 1.44 percent.

Bonds

Treasuries surged on Friday as investors positioned for a potential pullback from record high levels in the Dow and S&P. Near the close of equities, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT) was up 1.43 percent to $121.86. Higher Treasury prices caused yields to plummet on the day.

Although the 2-Year Note yield remained unchanged at 0.23 percent, the yield on the 5-Year Note lost three basis points to 0.69 percent. The yield on the 10-Year Note fell seven basis points to 1.72 percent and the 30-Year Bond yield lost eight basis points to 2.91 percent.

Currencies

The U.S. dollar was basically flat on Friday. Near the close of trading, the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was unchanged at $22.37.

The closely watched EUR/USD pair was last trading down 0.25 percent to $1.3079. The Japanese yen reversed recent trends and rose around 1 percent against the greenback on Friday. Moves in other currency pairs were all under 0.50 percent.

Volatility and Volume

The VIX fell on the day despite a surge in Treasury prices and small losses for the stock market. The widely watched barometer of market fear lost around 1.50 percent to close at 12.06.

Volume was lighter than normal with around 100.5 million SPDR S&P 500 ETF (NYSE:SPY) shares trading hands compared to a 3-month daily average of 124 million.

Stock Movers

Shares of Sinclair Broadcast Group (NASDAQ:SBGI) soared for the second day in a row after the company announced the acquisition of Fisher Communications (NASDAQ:FSCI). Near the closing bell, the stock was up around 17 percent.

Bankrate (NASDAQ:RATE) has surged better than 12 percent near the close after an analyst at Stifel Nicolaus raised his rating on the stock to "Buy" from "Hold" with a $17 price target.

Jones Group (NYSE:JNY) jumped better than 6 percent near the close after a report surfaced that hedge fund Barrington Capital Group is pressuring the company to sell parts of its portfolio.

Shares of Ashland (NYSE:ASH) was trading up almost 10 percent near the closing bell after hedge fund Jana Partners revealed a 7.4 percent stake in the company saying that they think the stock is undervalued.

InterOil (NYSE:IOC) climbed better than 7 percent on Friday after UpstreamOnline said that Shell is expected to partner with the company in Papua New Guinea.

Infosys (NASDAQ:INFY) lost more than 20 percent on Friday after the company issued a disappointing Q4 report and issued weak fiscal 2014 revenue guidance.

Shares of ImmunoGen (NASDAQ:IMGN) gave back recent gains related to drug data. The stock closed Friday's session down almost 10 percent.

Gold miner Barrick Gold (NYSE:ABX) plunged almost 9 percent to close out the week on the back of a better than 5 percent decline in gold futures.