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Daily ETF Wrap-Up by Rob Wherry (Author Archive)
Financial ETFs End Week in the Black
Market Wrap-Up
Heavy trading Friday in the shares of Microsoft (MSFT) and Google (GOOG) capped a raucous week in the stock market. The two tech bellwethers posted healthy quarterly profits of $4.3 billion and $1.3 billion, respectively, but those numbers failed to impress investors (as did Mircosoft's guidance). The two stocks influenced a downturn on the tech-heavy Nasdaq, which dropped around 1.2%. Meanwhile, Merrill Lynch (MER) also disappointed when it announced a $4.6 billion loss.
Ordinarily, a trifecta like that would translate into a bad day for stocks. But all that news was countered by a decent quarter from Citigroup (C) and IBM (IBM). A plan to raise $5.5 billion through a stock offering also breathed some life into the moribund shares of Freddie Mac (FRE).
No doubt investors will be relieved to put this week behind them. It started Monday after a weekend of wheeling and dealing that had the federal government announcing possible plans to buy stakes in Freddie and Fannie Mae (FNM). The shares of those two beleaguered mortgage giants were battered. But then on Wednesday Wells Fargo (WFC) surprised the market when it announced Street-beating quarterly earnings. That news started a record three-day rally in financial stocks.
Also helping stocks was a four-day pullback in crude oil prices. Investors have been worrying that slowing global economic growth will eventually lead to diminished needs for oil. The per-barrel price of crude finished the week at $129. It was at $145 a week ago.
The Dow Jones Industrial Average closed the week up 49 points to 11,496.
Winners
The dramatic turnaround in financial stocks made the ETFs that focus on that sector not only one of Friday's best performers but it also put them easily in the black for a week. The SPDR Select Financials (XLF) gained 3.1% Friday. Meanwhile, the iShares Dow Jones U.S. Financial Services fund (IYG) gained 11.8% the last five trading sessions.
If, indeed, the government launches a plan to help out Fannie and Freddie — and the companies can raise capital — that could bode well for the housing market. At least that's what some investors seemed to be betting on this week. The SPDR S&P Homebuilders (XHB) gained 10.6% for the week.
Losers
Energy ETFs aren't used to being in the basement. But that is exactly where many of them found themselves this week. Bloomberg reported that fuel consumption fell 3% in the first half of 2008, the largest drop during that period in 17 years. Traders have been anticipating that slower economic growth and high gas prices will lead to a cutback in demand. Oil, coal and other energy commodities fell most of the week.
The Market Vectors Coal ETF (KOL) dropped 3.3% on Friday and 14.2% over the last five trading sessions. For the week, the United States Gasoline fund (UGA) and the United States Oil ETF (USO) decreased 11.1% and 11.3%, respectively.
The Week's Industry Headlines
Launching Pad
Van Eck's Market Vectors Africa fund (AFK) began trading. The fund tracks the Dow Jones Africa Titans 50 index. These firms are either domiciled in Africa or derive 50% or more of their revenues from there. The fund charges a 0.83% annual expense ratio.
Next Week's Notebook
Keep an eye on the stock market Tuesday. Financial firms like Wachovia (WB) and Washington Mutual (WM) report. Also closely-watched stocks like Caterpillar (CAT), UnitedHealth (UNH), UPS (UPS) and DuPont (DD) will give investors an idea of how the economy is faring.
Earnings
Monday: Albermale Corp., American Mobile, Ametek, Apple, Bank of America, Boston Scientific, Canadian National Railway, Dr. Reddy's Laboratories, Equifax, Hasbro, Hercules, Idex, Lacrosse, Logitech, Merck, Mohawk, PetMed Express, SanDisk, Schering-Plough, Texas Instruments
Tuesday: Baker Hughes, Biogen, Broadcom, Caterpillar, CEC Entertainment, Cerner, Chicago Mercantile Exchange, Corn Products International, Domino's DuPont, E*Trade, Fifth Third, Forest Laboratories, Freeport McMoRan, Freescale Semiconductor, Halliburton, JetBlue, KeyCorp, Lockheed Martin, Nabors, Norfolk Southern, Panera Bread, Raymond James, SunTrust, UAL, UPS, UnitedHealth Group, Wachovia, Washington Mutual, Western Union, XTO Energy, Yahoo
Wednesday: Affiliated Managers Group, Aflac, Airgas, AllianceBernstein, Allstate, Amazon.com, Ameriprise, Anheuser-Busch, Ariba, AT&T, Boeing, Carter's, Chipotle Mexican Grill, Coachmen, Cohen & Steers, ConocoPhillips, Deltic Timber, EMC, Ethan Allen, Fair Isaac, General Dynamics, GlaxoSmithKline, Hershey, Judson City Bancorp, Jakks Pacific, McDonald's, McKesson, New York Times, Noble Corp., NutriSystem, Pepsico, Praxair, Pulte Homes, Travelers, Tractor Supply, WellPoint, Whirlpool, Wyeth
Thursday: 3M, AmeriSourceBergen, Baldor Electric, Build-A-Bear, Bunge, Canon, Celgene, Chubb, Credit Suisse, Crown Castle, Diamond Offshore, Dover Downs, East West Bancorp, Eli Lilly, EnCana, Flextronics, Friedman Billings Ramsey, Goodrich, Ikon Office Solutions, Kimberly Clarke, Level 3, MeadWestvaco, Newmont Mining, Occidental Petroleum, Old Republic International, Potash Corporation of Saskatchewan, RadioShack, Raytheon, Rohm & Haas, Roper, Syngenta, The Cheesecake Factory, The Dow Chemical Corp., TravelZoo, Union Pacific, Wynn Resorts, Zimmer
Friday: Arch Coal, Black & Decker, Coventry Health, Fortune Brands, Honda, ITT, Legg Mason, Republic Services, T. Rowe Price
Economic Data
Monday: Conference Board Leading Indicators (10 a.m.)
Tuesday: Chain Store Sales (7:45 a.m.), Retail Sales (8:55 a.m.), Richmond Fed Manufacturing Index (10 a.m.)
Thursday: Initial Jobless Claims (8:30 a.m.), Existing Home Sales (10 a.m.), Business Barometer (10 a.m.)
Friday: Durable Goods (8:30 a.m.), New Home Sales (10 a.m.)
Quick Take
A look at how the industry's most popular ETFs did on Friday.10 Largest ETFs | |||||
| Symbol | Net Assets | Price | 52 Week High | 52 Week Low | Volume |
71,655 | 126.05 | 156.39 | 121.48 | 251,974,642 | |
43,645 | 67.13 | 85.64 | 64.79 | 14,270,754 | |
20,935 | 129.87 | 165.39 | 117.49 | 16,723,644 | |
NA | 94.19 | 99.81 | 65.04 | 8,581,921 | |
16,690 | 126.06 | 156.65 | 121.69 | 4,102,994 | |
16,302 | 44.74 | 55.03 | 41.17 | 160,193,004 | |
13,253 | 53.87 | 63.64 | 52.79 | 5,297,437 | |
9,070 | 82.68 | 84.49 | 80 | 1,189,792 | |
10,116 | 63.1 | 77.66 | 60.89 | 3,186,927 | |
8,091 | 67.71 | 88.93 | 64.01 | 3,586,783 | |
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