Equity markets soared higher to close the week as the Dow finished just short of 11,000. Broad indexes recorded a sixth straight week of gains, as markets were boosted by a strong showing from Dow component Chevron, which rose by more than 2.25% in Friday trading. This came after the company said that it expects to turn a profit on its refining business after posting a loss in the previous quarter. Meanwhile, Palm soared higher by more than 10% and was among the five most widely traded stocks on Friday after takeover rumors by Taiwan’s HTC (which is currently the world’s fifth largest smartphone maker).
The ETFdb 60 Index finished the day up 5.81 points, or 0.5%, at a new 2010 high of 1,067.04. Only seven index components finished the day in negative territory.
One of the big winners on the day was United States Natural Gas Fund (UNG) which rose by 4% as traders took advantage of a steep drop in the gas over the past week. Natural gas futures fell roughly 8.6% over the past three days and the gas closed below $4/million BTUs for the first time in a week which helped to bring out bargain hunters. In addition, some analysts speculated that traders wanted to get out of their positions over the weekend in order to protect themselves from any volatile swings in before Monday morning. “Nobody wants to go into a weekend with the positions, so guys who were short are buying back,” said Michael Rose. “We are waiting for economic data to either support or deny confirmation of a recovery, which natural gas needs to move higher.” ( see What Every Investor Needs To Know About Commodity ETF Investing).
One of the biggest losers on the day was PowerShares DB USD Index Bullish Fund (UUP), which sank 0.75%. This was largely due to abating concerns over the Greek situation as the spread between Greek yields narrowed slightly. This was compounded by comments from ECB president Trichet who said that default ‘is not an issue‘ for the struggling nation, which helped to send the euro about 1% higher against the greenback. Meanwhile, there is growing speculation that the renminbi will be allowed to appreciate against the dollar, a rumor that if true could also put some downward pressure on the American currency. For more information about the Chinese currency and its revision, make sure to read Which Chinese Yuan ETF Is Best To Play Currency Revision?
Disclosure: No positions at time of writing.