U.S. stocks rose across the board in Thursday trading as quality earnings reports combined with hopes over a Greek bailout package to send shares higher. The Dow gained 1.2% while the S&P 500 rose by 1.4% although the tech-heavy Nasdaq trailed its counterparts in the session, gaining just 0.7% in comparison. In commodity markets, most major resource benchmarks finished the day slightly lower, dragged down by weakness in the metals, energy, and soft commodities. The only winners on the day were in the WTI market, sugar and a few other softs, as well as all of the livestock futures. This weakness was somewhat surprisingly given the broad downturn that the U.S. dollar experienced against the major currencies of the world as the U.S. dollar index fell by close to 1% on the day. The worst losses came against the euro which added close to 1.7 cents against the greenback, as well as the pound, which saw its value rise to 1.63 against the American currency. Meanwhile in the bond pits, traders are starting to grow uneasy over the lack of progress over the U.S. debt ceiling, helping to push the Ten Year back up to the 3.0% mark and the two year to the 40 basis point yield level.
One of the biggest ETF winners on the day was the Financial Select Sector SPDR (XLF) which gained 2.4% in Thursday trading. These gains were largely due to a robust quarterly earnings report from Morgan Stanley (MS) which reported a loss for the quarter but thoroughly crushed estimates. The investment giant reported that it lost 38 cents a share for the quarter, blowing past estimates which called for a loss of 62 cents a share. Additionally, revenues were $1.3 billion better than expectations which called for MS to report $8 billion in revenues for the quarter, further adding to the bullish tone of the report. This expectation beating number on the top line came thanks to fixed-income trading revenues of just over $2.09 billion and investment banking figures of $1.47 billion. Both of these figures beat out Goldman Sachs for the most recent quarter, causing traders to push up shares of MS by close to 11.4% in today’s trading session. This also helped to boost the fortunes of a variety of other trading and financial service related firms, giving XLF a nice jump in Thursday trading that was far ahead of the overall market [see holdings of XLF here].
One of the biggest losers in the ETF world was the United States Natural Gas Fund (UNG) which tumbled by 2.3% in the session. Today’s losses for the important cooling fuel came after today’s EIA storage report showed a slightly smaller than expected buildup in stockpiles of the fuel. The buildup came in at 60bcf, beating out expectations by two billion cubic feet. While this is generally a net positive for UNG, traders focused in on the fact that the buildup was five billion cubic feet larger than for the same time last year, a figure that turned many traders bearish considering the extreme heat plaguing much of the nation. Furthermore, supplies in the production region, which is experiencing much of the worst heat, still has stockpiles that are well above its five year average, further adding to the negativity. This is because many analysts were looking for a greater decrease in this region than the 6bcf that was experienced, especially considering the 100 degree temperatures which should have sent power demand through the roof. Thanks to this lackluster report, UNG tumbled during Thursday trading as front month contracts fell below the $4.4 mark, pushing this popular fund down 1.9% over the past quarter [see more fundamentals of UNG here].
Disclosure: No positions at time of writing.
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