After a hectic Friday session that saw allegations of fraud at Goldman Sachs, the financial sector was once again in focus on Monday, with investors digesting key earnings reports and placing bets on the long-term impact of the SEC investigation on GS stock and the sector as a whole. Democrats in Washington ramped up their efforts to push through financial overhaul legislation, capitalizing on mistrust of the sector after allegations that at least one Wall Street institution was selling securities it expected to fail. The timing of the push drew criticism from politicians who suspected a coordination of the Goldman charges with Senator Dodd’s push for increased oversight. Elsewhere, General Motors announced that it plans to repay nearly $6 billion in U.S. and Canadian government loans prior to its self-imposed June deadline, the latest in a string of positive indications for the global auto industry.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, slid 1.57 points, or 0.1%, to finish at 1,062.75. Losers outnumbered winners by more than two-to-one, while aggregate volume exceeded 1 billion shares for the second straight trading day.
The biggest winner on the day was the Financials Select Sector SPDR (XLF; technicals; charts; fact sheet) which recovered from a disastrous Friday to finish up 0.8% on Monday. XLF’s boost came from two primary sources, including a rebound in Goldman’s stock price (which lost more than 10% on Friday) and strong earnings from Citi. Citigroup reported first quarter profit of $4.4 billion, and issued a generally positive outlook (see ETFs with Goldman Sachs Exposure).
One of the biggest losers on the day was the United States Natural Gas Fund (UNG; fundamentals; technicals), which slid 1.8% to open the week. Sliding oil prices, a mild weather outlook, and analyst downgrades. Credit Suisse cut its 2010 outlook for NYMEX gas futures to $4.66/MMBtu from $5.25, citing increased drilling activity. Oilfield services firm Baker Hughes said rigs drilling for natural gas reached 973 last week, a 28% increase from the end of 2009.
In Algeria, ministers from the largest natural gas producing countries said that they would work to index gas prices to oil after natural gas failed to rebound from recent lows. Because natural gas, unlike crude oil, is a local commodity, developments overseas have very little impact on the prices of gas futures traded in the U.S. But technological developments in recent years have begun to make storage and transport of natural gas more cost efficient and practical, potentially setting the stage for natural gas to become a global commodity.
Disclosure: No positions at time of writing.