In recent weeks, a number of statistical data releases have seemingly indicated that the U.S. recovery remains on track, with the manufacturing sector finally showing signs of life. On Tuesday, a number of positive company-specific developments, coupled with some good news from Europe, send markets sharply higher, pushing the S&P 500 into positive territory on the year and the Dow above its 200-day moving average. A bright outlook from Best Buy pushed up the tech sector, as did reports the Research In Motion is experimenting with a tablet device. Even the energy sector turned in a solid performance ahead of an Oval Office address from President Obama that many expect to include a push for the development of alternative energy sources and a reduction on crude oil dependence (see Five ETFs In Focus Ahead Of Oval Office Address).
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, added 14.73 points, or 1.4%. Winners outnumbered losers by more than four-to-one on the day, as every equity component of the benchmark finished in positive territory.
Among the biggest winners on the day was the United States Natural Gas Fund (UNG), which added 3.3% and is now up16% over the last four weeks. Expectations for hot temperatures have boosted UNG in recent weeks, and speculation that the Obama administration will place renewed emphasis on developing alternatives to foreign crude oil extended the rally. The National Weather Service continued to monitor a cluster of Atlantic thunderstorms on Tuesday that could turn into a tropical cyclone. The National Oceanic and Atmospheric administration has forecast an 85% chance of an above-average hurricane season, predicting between 8 and 14 hurricanes. Three to seven of those storms are projected to be major. Because the Gulf Coast accounts for a significant portion of domestic natural gas production, an active hurricane season could result in supply disruptions, sending prices higher.
Also jumping on Tuesday was the Vanguard European ETF (VGK), which closed 3.7% higher as investors sought out risky assets. Spain and Belgium completed successful debt auctions–albeit at elevated rates–easing some fears that euro zone governments could encounter difficulties tapping capital markets for financing. That helped to boost the euro slightly, as the common currency reclaimed some of the ground lost against major rivals in recent weeks.
Disclosure: No positions at time of writing.