The financial sector was in focus on Friday as Obama unveiled a plan to tax 50 banks, insurance firms, and broker-dealers in a plan to recoup $90 billion dollars of government funds. Signs of a recovery continued to emerge, and major benchmarks reached 15-month highs. After hours, Intel reported stronger than expected earnings, setting the stage for another strong session to close the week.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, was essentially flat, losing 0.10 points to close at 1,053.48. Gainers outnumbered losers by about two-to-one, but steep losses by a number of components weighed on the benchmark.
The United States Natural Gas Fund (UNG) lost 2.5% following the weekly announcement on inventory levels from the Energy Information Administration. The EIA reported that the amount of natural gas in storage dropped by 266 billion cubic feet. Although the drawdown exceeded the average expectations of analysts polled, traders had obviously been hoping for a more significant reduction. Natural gas futures markets continue to be in a state of short-term backwardation, with prices of futures contracts declining from February to March and March to April. Following Thursday’s decline, UNG was essentially flat on the year, having quickly given back significant gains from the first week of 2010.
Among the biggest gainers on Thursday was the iShares MSCI Japan Index Fund (EWJ), which added 1.5% as the yen declined and receding worries about credit-tightening in China boosted commodity companies. Despite a strong auction of 40-year bonds, government bond yields rose as demand for safe havens waned in response to the market’s advance.
Disclosure: No positions at time of writing.