Daily ETF Roundup: IWM Soars On M&A Activity, UNG Suffers On Cool-Down

by on August 15, 2011 | ETFs Mentioned:

Monday saw a healthy jump in equities as markets have officially reclaimed all of the losses incurred last week. The 200 point surge in the Dow was brought on by positive data from Japan as well as M&A activity on Wall Street. Along with equities, oil made significant headway as the price of crude is nearing the $88 per barrel mark. This strong day for oil comes as Royal Dutch Shell’s sizable spill in the North Sea has now put the company in hot water, sending flashbacks to last year’s Deepwater Horizon Spill that ravaged the Gulf of Mexico.

Gold also saw a nice jump to start the week, as the precious metal is hovering around its historic high and threatening to hit the $1,800 per ounce level at the first blip of any sort of economic trouble. With the last week or so being one of the wildest string of trading sessions in recent memory, investor anxiety is still high despite Monday’s strong returns. As we have seen, all it takes is one bad report or outlook to send markets back into their furious tailspin. But for now, investors will take any winning days they can get, as most major equities surged during Monday’s session [see also Gold SPDR Close To Overtaking SPY As Largest ETF In The World].

One of biggest ETF winners on the day came from the Russell 2000 Index Fund (IWM). This fund seeks to track a vast number of small cap stocks and is an investor favorite, with an average daily volume of more than 75 million. IWM saw strong gains today in light of the news that Google would be purchasing Motorola Mobile, boosting markets as a whole. Interestingly enough, this deal caused almost all major equities to gain save one: Google (GOOG). Investors seemed unhappy with the legal troubles and other loopholes facing Google’s Android system, and were perhaps skeptical of the huge premium paid to acquire Motorola’s mobile business. Regardless of what the acquisition, the largest ever in Google’s history with a value of approximately $12.5 billion, means for the smartphone market, IWM seemed pleased, as it turned in a nice 2.82% gain on the day [see also Small Cap ETFdb Portfolio Now Available].

One of the biggest ETF losers on the day came from the popular United States Natural Gas Fund (UNG). Traders of this fund are already aware that UNG is no stranger to big movements day to day, as natural gas is a volatile commodity. Today, losses in this vital energy source came from a weather forecast that called for cooler temperatures across the charred U.S., after some areas had endured weeks of triple digit temperatures in July. The break in the weather suggests a dip in demand for natural gas, as less households and businesses will be needing the fuel for cooling purposes. Meteorologist Dan Leonard at Weather Services International commented that August looks like it will be much cooler than July, stating that “we’ll still have the hot days, but they’re not going to be relentless like they were last month.” UNG sank just under 1% for the day [see also ETF Price Cuts: NAGS, EPI Slash Fees].

(Note that the following chart contains both 8/12/2011 and 8/15/2011. While UNG appears to have been up on the day according to Monday’s chart, the fund opened significantly lower from Friday’s close, bringing it to its realized losses for the day)

Disclosure: No positions at time of writing.