The Dow finally broke its eight-session winning streak as severe weakness out of blue chip Cisco dragged the popular benchmark into the red for the first time this month. Meanwhile, both the Nasdaq and the S&P 500 managed to post tiny gains of one point each, as their broader focuses helped to dilute the impact from weakness in the technology and banking sectors. Commodity markets were also mixed as weakness in the oil markets was balanced out by strong performances in the livestock and soft commodity sectors. Another winner on the day was the U.S. dollar which saw significant inflows thanks to ongoing turbulence in the European debt markets and continued speculation over the situation in Egypt which is continuing to unnerve investors. This pushed the U.S. dollar index up by 0.8% on the day with the biggest gains coming against the euro and the yen.
One of the biggest gainers on the day was the iShares Dow Jones Transportation Fund (IYT) which gained 1.5% in Thursday trading. These gains were largely the result of a report from the Association of American Railroads which showed that the number of freight carloads on North American railroads was up over the past week suggesting that shipments of raw materials was on the rise. In total, carloads rose 0.1% over the same week a year ago, pushing the total year to date carloads up by more than 4.8% compared to the same period in 2010. As a result, many of the fund’s top railroad holdings, such as Union Pacific, CSX Corp, and Nortfolk Southern, all moved higher on the day carrying IYT to an impressive gain considering the broad market malaise in Thursday trading [see holdings of IYT here].
One of the biggest losers in the ETFdb 60 was the United States Natural Gas Fund (UNG) which tumbled by 2.6% during the session. These losses came as the EIA released its weekly inventory report on stockpiles of the popular heating fuel, disappointing investors who had expected a huge drawdown thanks to incredibly cold weather across much of the country. Although supplies declined by 209 bcf in the period, this was not enough to move the markets higher as investors focused in on the robust production capabilities for the gas as well as the prediction for warmer weather in weeks ahead. “Another big withdrawal and another shrug from the market,” Houston energy consultancy Gelber & Associates wrote in a note to clients. “This should tell us two things…1) There’s tremendous faith in production levels and 2) All eyes are on the forecasts ahead instead of the frigid weather we’re enduring today.” [see charts of UNG here]
Disclosure: No positions at time of writing.