Home-Builder ETFs Fall on Poor Data

Market Wrap-Up

For the last few weeks the dismal prospects of the housing industry had been overshadowed by the even worse predicament playing out in financials. Thursday, though, traders were reminded that housing is still a bad bet. According to the National Association of Realtors existing home sales fell 2.6% in June — that was a bigger than expected dip — and home values sank 6.1% from a year ago. Home builders of every variety fell during the session. An uptick in jobless claims for the week didn't give investors confidence, either.

A rally in financials that started when Wells Fargo (WFC) announced surprising quarterly results last Wednesday ended with renewed pressure on Washington Mutual (WM). The bank denied a credit analyst's claim that its creditors were cutting exposure in the wake of the $3.3 billion quarterly loss reported this week. WaMu's stock lost 13%, weighing on others in the banking industry.

Having shed 5% this week, oil recorded a small gain. September crude futures rose $1.05 to $125.49 per barrel.

But it was the housing woes that ultimately dictated the stock market's direction. The Dow Jones Industrial Average lost 283 points to 11,349.

Winners

Amazon.com (AMZN) announced it made $158 million on $4.1 billion in sales. That was a 102% increase in net income from last year. The internet retailer's shares increased 12.5%. That gain helped the Internet HOLDRs (HHH) jump 2%. The fund has around a 30% weighting in the company.

Losers

The unexpected downturn in existing home sales caused traders to sell housing stocks. The ETFs that follow this industry had been quietly making a comeback of sorts. But Thursday the SPDR S&P Homebuilders ETF (XHB) dropped 10.4%. Surprisingly, though, the fund is only down 2% for the year. This fund owns companies like Toll Brothers (TOL), Pulte Homes (PHM) and Home Depot (HD). The iShares Dow Jones U.S. Home Construction fund (ITB) dropped 9.8%.

Washington Mutual helped drag down some financial services ETFs. The SPDR KBW Bank ETF (KBE), which counts WaMu among its holdings, dropped 7.8%.

Thursday's Industry Headlines

Launching Pad Van Eck announced the launch of Market Vectors Gulf States ETF (MES). This fund tracks an index of 40 companies located in countries like Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. It charges an annual fee of $98 for every $10,000 invested.

Friday's Notebook

Earnings
Arch Coal, Black & Decker, Coventry Health, Fortune Brands, Honda, ITT, Legg Mason, Republic Services, T. Rowe Price

Economic Data
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 Thursday.

10 Largest ETFs
Symbol	Net Assets	Price	52 Week High	52 Week Low	Volume
SPY	71,655	125.51	156.39	121.48	244,605,437
EFA	43,645	66.76	85.64	64.79	9,626,146
EEM	20,935	42.26	165.39	117.49	32,059,623
GLD	NA	91.35	99.81	65.04	13,064,797
IVV	16,690	125.67	156.65	121.69	5,136,864
QQQQ	16,302	44.69	55.03	41.17	145,996,499
IWF	13,253	53.31	63.64	52.79	3,686,181
SHY	9,070	82.83	84.49	80.13	519,996
VTI	10,116	62.91	77.66	60.89	2,289,528
IWD	8,091	67.55	88.24	64.01	2,724,999