Daily ETF Roundup: JJC Slips, UNG Rallies On Inventory Data

by on June 17, 2010 | ETFs Mentioned:

All eyes were on Capitol Hill on Thursday, as embattled BP chief Tony Hayward responded to lawmakers accusing the British oil giant of sacrificing safety to cut costs. Hayward struck an apologetic tone, saying that he regretted the impact of the disaster on Gulf Coast residents. He also deferred many heated questions until an internal investigation is complete, giving members of Congress few opportunities to pounce on missteps (see Seven ETFs For Investors Mourning The Death Of BP’s Dividend). Elsewhere on Thursday, EU leaders agreed to publish the results of bank “stress tests” by next month at the latest, a release that will be closely scrutinized by investors around the world. 

The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, inched up 1.37 points, or 0.1%, despite the fact that winners outnumbered losers by nearly two-to-one on the day.

Among the biggest winners on the day was the United States Natural Gas Fund (UNG), which surged 2.8% after a government report indicated that natural gas stocks rose less than expected for the week ended June 11. Underground storage rose by about 87 billion cubic feet, slightly less than the 90 billion cubic feet addition expected. Inventory levels are still about 14% higher than the five year average, reflecting the significant supply increases over the last year.

Natural gas prices have surged over the last several weeks, adding about 25% since late May. The steep run-up has been the result of a combination of positive developments, including expectations for an active hurricane season, warmer-than-usual weather, and a bullish outlook for the industrial sector (see Five Factors Driving UNG’s Spring Rally).

Losing ground on Thursday was the iPath Dow Jones-UBS Copper ETN (JJC) which slid 2.3% on the day. Copper prices sunk as questions about demand from top consumers swirled after the first inventory build in a month. The Philadelphia Federal Reserve Bank reported that factory activity plunged in the Mid-Atlantic region, and the Labor Department reported a larger-than-expected increase in jobless claims. “There are really two very large forces in the copper market,” said Justin Lennon, an analyst with Mitsui Bussan Commodities. “One is consumption by China, and the second one is the expectation of China’s consumption by the investor community. Without the beast that is China to take in metal, a market surplus becomes more apparent.”

Disclosure: No positions at time of writing.