Home Builder ETFs Enjoy Rare Uptick

Market Wrap-Up

Stocks rose Wednesday after a Commerce Department report showed durable goods orders -- big-ticket items like cars or appliances -- inched up an unexpected 1.3%, the third straight month an increase has been recorded. That data implied that businesses and consumers may not be feeling as much of an economic pinch as feared (or maybe they were just getting great deals.)

Another government report, this one from the Department of Energy, found that oil inventories fell by 177,000 barrels last week. That news was coupled with forecasts that Hurricane Gustav could beat a path directly for offshore energy platforms in the Gulf of Mexico. The price for a barrel of oil gained just over $2 to finish at the $118 level.

Meanwhile, shares of Fannie Mae (FNM) and Freddie Mac (FRE) continued to gain traction as investor fears eased about a potential government bailout of the two mortgage giants. That uptick, along with a reduction in inventories of unsold new homes relative to sales, helped home builder stocks rally.

The Dow Jones Industrial Average rose 90 points to 11,503.

Winners

The home-building industry appears to working through its excess inventory and data from earlier in the week indicated existing homes rose as well, albeit less than expected. Mortgage applications are up. With Freddie and Fannie shares, investors are once again buzzing about a possible bottom in the beleaguered housing sector. The iShares Dow Jones U.S. Home Construction fund (ITB) gained 4.8%. The SPDR S&P Homebuilders ETF (XHB) moved up 3.7% Wednesday.

Losers

Shares of Amylin Pharmaceuticals (AMLN) fell 24.8% to their lowest levels in three years after the company said its diabetes drug, Byetta, had been associated with several patient deaths. That pullback impacted the SPDR S&P Biotech ETF (XBI), which has a 4% weighting in the company, causing it to post a loss of 1.8%.

Wednesday's Industry Headlines

Launching Pad
Invesco PowerShares announced it would probably launch four new funds on Sept. 18. They include ETFs that focus on the agricultural sector, coal, gold and precious metals and steel. On Tuesday the company announced it would also try to launch a progressive transportation ETF on the same day.

Thursday's Notebook

Earnings & Conference Calls
Thursday: ATA, Brown-Forman, Del Monte, Dell, Fred's, Gerber Scientific, Jamba Juice, LaBarge, Marvell Technology, Novell, PetSmart, Sears, Tiffany, Williams-Sonoma, Zale

Economic Data
Thursday
8:30a.m. Initial Jobless Claims
8:30a.m. 2Q GDP, Preliminary
8:30a.m. 2Q Corporate Profits, Preliminary
10:00a.m. Business Barometer

Quick Take

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