American equity markets continued a bullish trend in Wednesday trading, as all the major indexes posted modest gains on the day. The Dow was up 26 points on the day while the Nasdaq and the S&P 500 gained 0.2% and 0.3%, respectively. Meanwhile, in commodity markets precious metals finished the day down marginally while oil managed to crack through the $90/bbl. level, pushing crude up to its highest level in two years. Currency and bond markets were relatively unchanged as the dollar was flat in light trading. However, T-bonds continued to be weak as yields rose across most maturity levels thanks to ongoing fears over American debt concerns.
Today’s market moving events came from a few key data releases, as well as solid earnings reports from a couple of important market components. Before the bell, the government announced that it was revising its estimate of third-quarter GDP growth upwards slightly, but the estimates still came in below analyst expectations. This news was soon followed by a more bullish reading in the housing market, where sales of existing home sales climbed by 5.6% in November. That was good news for the beaten-down market, especially considering that rising rates could begin to impact the troubled sector in the near future. Lastly, the retail sector also received more good news as Walgreen’s reported a 19% increase in its first-quarter profit, helping to propel shares higher by more than 7% on the day.
One of the biggest ETF winners on the day was State Street’s Financial Select Sector SPDR (XLF), which gained 1.1% on the day. Today’s surge came after a number of the nation’s largest banks–and biggest components of XLF–enjoyed strong trading sessions. Bank of America, JP Morgan, Sun Trust, and Bank of New York Mellon all rose by at least 2.5% on the day, as banking stocks were boosted by rising consumer sentiment and hopes that relatively strong levels of growth would lead to a bullish stock market and more robust lending heading into 2011. It also didn’t hurt that a number of banks repaid their TARP funds today, further suggesting that tailwinds were at the industry’s back. This more bullish outlook helped to push banking stocks higher on the day and give XLF a 4.2% return over the past two weeks [see fundamentals of XLF here].
One of the biggest losers in the ETFdb 60 was the Market Vectors Gold Miners ETF (GDX), which sank by 1.2% on the day. Today’s modest losses came after gold prices slid marginally and fears over the global economic situation cooled temporarily. Another factor that played into GDX”s tumble in Wednesday trading was that many of the fund’s top securities are listed on the Toronto Stock Exchange and are priced in Canadian dollars. Since the greenback experienced weakness today, the stronger loonie hurt many of these resource dependent firms as their profits stood to tumble when this happens in tandem with a gold price drop [see technicals of GDX here].
Disclosure: No positions at time of writing.