The American markets finished higher on Friday and last week, thanks to better than expected earnings and despite weaker than expected first quarter economic growth.

The S&P 500 Index added 3.38 points, or 0.2%, to 1,403.36, with the index up 1.8% for the week.

The Standard & Poor's 500 closed above 1,400 for the first time since April 3 and the Nasdaq Composite jumped 2.3% for the week, thanks to strong earnings reports from Apple and Amazon.

And the Dow ended up 1.5% over the week.

It was the index's second straight weekly gain.

US bond yields eased lower on Friday, with the 10 year bond yielding 1.93%, after reaching 1.88% at one stage.

Stock indexes maintained their gains after the Commerce Department reported the US economy expanded less than expected in the first quarter.

In its first estimate Friday night, our time, the US Commerce Department said gross domestic product rose at a 2.2% annual rate between January and March, slower than the 3% pace in the December quarter.

Average market forecasts were for GDP to be up between 2.5% and 2.7%.

The slower growth came despite a welcome pickup in consumer spending, to its fastest pace in over a year.

The biggest negative surprise was a drop in business spending and a sharp rise in inventories. Government spending slumped as well.

Consumer spending rose 2.9% in the first quarter, after a 2.1% rise in the previous three months.

Consumer spending added 2 percentage points to GDP.

But it came at a cost as the savings ratio fell to 3.9%, the lowest for four years.

Among US profits on Friday, America's biggest consumer product company Procter & Gamble cut its profit forecast for this year and saw the shares fall 3.6%.

And Ford Motor Co reported higher-than-anticipated profit as robust results in North America helped stem a slide in international demand and profits that cut the overall result.

In Australia, the futures market saw a solid gain overnight Friday and our market should open strongly this morning.

The Share Price Index Futures rose 28 points to 4397.

The dollar jumped by nearly a cent overnight Friday to close at $US1.0471 as the US dollar fell in the wake of the weaker than expected GDP figures, and despite the growing concerns about the health of the Spanish economy and the Presidential poll in France.

On Friday the S&P/ASX200 index lost 13.1 points or 0.3% to 4362.1, while the All Ords fell 11.6 points or 0.3% to 4433.4.

For the week the index lost 0%. Year-to-date, the market is up 7.5%, while the S&P in the US is up by around 11%.

Locally, retailers were sold-off after a steep profit downgrade by former market darling JB Hi-Fi which fell 6.3%.

Harvey Norman lost 2.4% and department store Myer was off 2.9%.

Shares in Macquarie Group outperformed, climbing 3% on Friday after the investment bank reported a slightly smaller-than-expected 23% fall in second-half net profit.

In Asia, Japan's Nikkei Stock Average ended 0.4% lower on Friday, after rising more than 1% following the central bank's announcement.

Hong Kong's Hang Seng Index climbed 0.3%, but China's Shanghai Composite Index fell 0.4%.

Australia's ASX 200 index fell 0.3%, but South Korea's added 0.6% after record results from Samsung Electronics Co.

For the week, Asia fell as a whole.

The MSCI Asia Pacific index ended off 0.1%, on top of the 0.7% fall the week before.

Tokyo saw the Nikkei down 0.4%, Australia was slightly lower as was South Korea's Kopsi.

Kong's Hang Seng Index lost 1.3% and the Shanghai lost 0.4%.

In Europe the Stoxx 600 Index rose 0.5% last week, extending the previous week's 1.7% gain.

That was after it hit a three month low on April 23.

Bloomberg said national markets rose in 12 of the 18 western European markets.

The UK's FTSE rose 0.1%, Germany's Dax was up 0.8% and France's CAC 40 was up 2.4%, despite the poor showing by President Sarkozy in the first round of the Presidential election.

Spain's IBEX 35 Index closed with a 1.5% gain despite Standard and Poor's cutting its credit rating for a second time in 2012, and figures showing that unemployment hit the highest level in 18 years with nearly one in four people out of work.

In commodities crude oil futures ended higher overnight Friday.

New York crude oil futures prices for June delivery added 38c, or 0.4%, to settle at $US104.93 a barrel.

That was the highest finish in more than three weeks and took the weekly gain to 1%.

Other energy products also had a good week, with natural-gas futures up 8.5% on the five-day period.

In London, Brent oil for June settlement slipped 9c to end the session at $US119.83 a barrel.

Natural gas for June delivery rose 6c, or 2.5%, to end at $US2.30 per million British thermal units, also the highest finish since April 3.

That brought weekly gains to 8.5%, its best weekly showing in three months.

New York gold futures rose Friday, as the US dollar weakened on news the American economy was weaker than expected in the first quarter.

Comex gold for June delivery rose $US4.30, or 0.3%, to $US1,664.80 an ounce.

That was gold's highest finish since April 12 and one that took weekly gains to 1.4%.

US gold prices jumped 1.1% on Thursday and continued the rise on Friday.

Other metals futures also traded higher.

Comex silver for July delivery, the most active contract, rose 14c, or 0.5%, to $US31.35 an ounce.

But silver lost 1% over the week.

Comex copper for the same month's delivery jumped 5c, or 1.4%, to $US3.825 a pound.

That was copper's highest close in three weeks, and took the week's rise to a solid 3.4%.

Copyright Australasian Investment Review.
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