Housing ETFs Enjoy Rare Day in the Black

Investors pushed stocks and ETFs higher Tuesday, after several key bellwether companies reported decent earnings and talk on Capitol Hill heated up about a Republican version of a stimulus plan that would include billions of dollars of tax cuts. After initially falling lower, major indexes reversed course throughout much of the session. The Dow Jones Industrial Average gained 141 points to cross over the 8,000 level and finish at 8078.

United Parcel Service (UPS) and Merck (MRK) both swung to profits in the fourth quarter after losing money during the same time period in 2007. And investors cheered that news, sending shares of both companies higher.

But not every sector was in the black. Financials continued to tumble. Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) all traded lower Tuesday.

In economic and government news, the National Association of Realtors announced better-than-expected figures for pending home sales. Excitement over that news was kept in check by a report from Zillow.com that estimated nearly a third of all home sales last year were prompted by a dire event like foreclosure. In Washington, Tom Daschle withdrew his nomination for the head of Health & Human Services after a sticky tax issue became too controversial. That was a setback for the new Obama administration. But that team did recover a bit. President Obama announced he was nominating Judd Gregg, a Republican senator from New Hampshire, to be secretary of the Commerce Department.

Oil prices held stead Tuesday as traders debated what impact a stimulus package would have on demand. Oil closed up 82 cents to $40.90.

The news on the housing sector gave a rare pop to sector-related ETFs. The SPDR S&P Homebuilders fund (XHB) rose 7.8% and the iShares Dow Jones U.S. Home Construction fund (ITB) jumped 6.9%.

The PowerShares Active U.S. Real Estate fund (PSR) took a 5% hit Tuesday in the wake of the Zillow.com report. Nationally, $3.3 trillion in property value was lost in 2008, according to Zillow.

Financials once again brought up the rear. Both the Regional Bank HOLDRS (RKH) and SPDR KBW Bank (KBE) ETFs slumped Tuesday, the former by 4.8%, the latter by 5.6%.

Launching Pad
Trading began on the Van Eck Global Market Vectors Pre-Refunded Municipal Index fund. The ETF tracks the price and yield performance of the Barclays Capital Municipal Pre-Refunded Treasury Escrowed index and has an expense ratio of 0.24%. Pre-refunded munis are bonds that have been refinanced by their issuers and remain outstanding in the municipal market, and are secured by U.S Treasuries as well as debt issued for escrow use by municipal users.

Akamai Technologies, Alcatel-Lucent, Allergan, Avalonbay Communities, BHP Billiton, Cisco Systems, Clorox, Devon Energy, Diebold, Goodrich, ITT, Kraft Food, Philip Morris, Polo Ralph Lauren, Prudential Financial, Pulte Homes, Ryder Systems, Sara Lee, Sunoco, Time Warner, Tupperware, Visa

8:15 a.m. Jan. ADP Employment Survey
10:00 a.m. Jan. Non-Manufacturing Index
10:30 a.m. U.S. Energy Dept. Oil Inventories

A look at how the industry's most popular ETFs did on Tuesday.