Equity markets finished relatively flat on Monday, as most investors waited for earnings season to begin after the bell with aluminum giant Alcoa and railroad company CSX kicking things off. The Dow finished ahead by 18 points while the Nasdaq and S&P 500 both traded up by less than 2 points each. In commodity markets, oil and gold slumped back with oil falling more than 1.5% and gold dropping back below the $1,200/oz. mark. Many are expecting a strong earnings season with profits likely to far outpace numbers from the second quarter of last year when the economy was at its lowest point. “It has been one of the strongest profits recoveries ever,” said David S. Bianco, chief United States equity strategist for Bank of America Merrill Lynch. “You have got to go back to the Depression to find a profits recovery that outpaces this one.”
One of the biggest gainers in the ETFdb 60 was the Technology Select Sector SPDR (XLK), which trended higher by 0.5% on the day. This boost was largely due to strong performances out of Microsoft and Intel, which jumped higher by 2.3% and 1.6% respectively. The two companies combine to make up just over 13% of the total assets in XLK, a fund that tracks the broad Technology Select Sector Index. In addition to allocating high levels to computer companies, that benchmark also has heavy allocations to internet, and telecommunication companies as well. The fund is down 6.3% thus far in 2010 but is up more than 20% over the past 52 weeks [see more fundamentals of XLK here].
One of the biggest losers in the ETFdb 60 was the iShares MSCI Brazil Index Fund (EWZ), which fell by 2.7% in Monday’s trading. This drop came due to weakness in the metals and oil sectors, which helped to drag down two of the major components of EWZ, mining giant Vale and oil company PetroBras. This was relatively surprising given the positive economic data that came out of the country early in the trading session, forecasting tamer-than-expected inflation levels going forward. Brazilian stocks initially jumped on this news but slumped back as commodity prices tumbled in mid-day trading [see charts of EWZ here].
Disclosure: Eric is long EWZ.