Friday Slide Slams ETFs, Wipes Out Gains

Stocks closed down Friday, with energy prices and a broad slide in equities weighing on many exchange-traded funds, even as top-line growth brightened earnings reports.

The Dow Jones Industrial Average dropped 108 points to 9972. The Nasdaq finished down 11 at 2154, and the S&P 500 ended down 13 at 1080.

Microsoft (MSFT) reported an 18% drop in fiscal first-quarter earnings, but the results easily topped forecasts and the software giant's stock surged. Honeywell International (HON) gained after it said third-quarter earnings fell 15% on continued weakness in sales, especially to commercial airlines, and the company lowered its 2009 revenue guidance.

As of 4:04 p.m., crude oil futures traded on the Nymex were down 53 cents at $79.97 a barrel. For a detailed rundown on Friday’s trading session see our market story. 

The iShares MSCI Sweden Index fund (EWD) hung on to a 1.5% gain after the Swedish market closed up on Friday. The United States Oil Fund (USO) clung to a 1.5% weekly gain as well, despite a Friday drop in oil prices.

The iShares Dow Jones Transportation Average Index fund (IYT) dropped 5.4% on trucking woes. The Market Vectors Gold Miners fund (GDX) dropped 3.8% as gold prices receded.

Launching Pad
Claymore Securities launched the Claymore/AlphaShares China All-Cap ETF (YAO), which invests in a basket of 99 small-, mid- and large-cap Chinese companies. It now has three China-related funds. AlphaShares has two other ETF offerings with Claymore: the Claymore/AlphaShares China Real Estate ETF (TAO) and the Claymore/AlphaShares China Small Cap Index ETF (HAO). The fund will charge an expense ratio of 0.7%.

The ETFS Palladium Trust plans to launch the ETFS Physical Palladium (PALL) fund, whose shares are backed by actual palladium. ETF Securities USA is the sponsor of the trust; Bank of New York Mellon is the trustee and JPMorgan Chase Bank is the custodian. It will sell shares only in one or more blocks of 50,000 shares and will not sell fractions of that amount. The palladium that backs the fund will be stored in vaults in London and Zurich.

Pimco plans to launch a pair of Treasury-linked exchange-traded funds. The offerings from the world's largest bond fund manager in terms of assets, will track the BofA Merrill Lynch Long Treasury Principal STRIPS with the Index Pimco 20+ Year Zero Coupon U.S. Treasury Index fund (ZROZ), while the Pimco 3-7 Year U.S. Treasury Index Fund (FIVZ) will track the Merrill Lynch 3-7 Year U.S. Treasury Index. The 20-year fund was listed Friday but has not started trading. Both funds will charge 0.15% in expenses, according to the prospectuses.

Van Eck Global plans to launch a new exchange-traded fund based on an index of small and medium sized gold mining and exploration companies. The manager has not yet launched the fund, which will track 38 companies, but expects to do so before the end of the year. Van Eck's Gold Miners fund (GDX) tracks an index of larger mining and exploration companies. It charges 0.55% annually.

Barclays Global Investors plans to launch a family of municipal bond exchange-traded funds targeting certain maturity dates. Each fund is designed to hold the underlying securities from its respective index to full maturity, then convert them to cash for distribution to shareholders. The funds will track the recently launched S&P AMT-Free Municipal Bond Index Series.