Daily ETF Roundup: VGK Soars On Europe Plans, UNG Plummets On Weather

by on November 28, 2011

Stocks opened up the final week of the month on a strong note, with major indexes posting massive gains. The Dow jumped 291 points while the S&P 500 tacked on 2.9%, bringing it near the 1,200 mark. The NASDAQ composite was the biggest index winner, with gains of over 3.5% for the day. Oil saw a welcomed rise to $97.77 per barrel as the commodity makes its way towards triple digit territory once again. Gains today were propelled by good news from the euro-zone as well as the massive Black Friday sales that proved that consumers are still willing to shell out their disposable income for themselves [see also ETF Insider: Investors Shopping For Hope]. 

For the past six years, Black Friday has been the biggest sales day of the year. Many retailers were fearful that an uncertain economic environment would hinder this year’s sales, but numbers have come in strong, as it appears a record number of shoppers hit the streets or internet this past weekend to make their purchases. “The retail numbers add to a growing set of indicators, including steady drops in the number of applications for unemployment, that suggest the U.S. is far from the second recession economists had begun to fear in August” writes Francesca Levy. The coming week will feature a number of important statistics from the U.S. that will hopefully keep markets about their winning ways. For now, we outline two of the most notable ETF performances from Monday’s trading session [see also As Bill Miller Departs, Some Value ETF Alternatives].

One of the biggest winners on the day came from the European ETF (VGK), which saw massive gains of 5.4% on the day. To say this ETF has been beaten down as of late would be quite an understatement. VGK has been one of the hardest hit funds over the past few weeks, losing 21% since the beginning of August. But today’s strong gains came from hopeful news from the euro zone. Leaders from all around the indebted currency bloc have been discussing new approaches for the region’s fiscal troubles. Investor speculation of a decisive action by the euro-zone led to VGK’s gains and could continue to do so if the news stays positive [see also Euro Free Europe Portfolio Now Available]. 

One of the biggest ETF losers on the day came from the United States Natural Gas Fund LP (UNG), which surrendered 2.5% in today’s session. This ETF tracks front month natural gas contracts and is one of the most popular products in the space. UNG’s average daily volume has been falling around 9.3 million, but today the fund traded 11.3 million shares as the ETF lost significant ground. The reason for the poor performance stems from supply issues. Though there was a lower than expected rise in supplies, natural gas storage is still well above the five year average as mild weather curtails the demand for this commodity. “In fact, the most recent inventory-build has taken the storage level to a new all-time high” writes Zacks Equity Research [see also 25 Ways To Invest In Natural Gas].


Disclosure: No positions at time of writing.