Daily ETF Roundup: XLE Soars On Crude’s Strength, VXX Falls As Markets Hold Firm

by on November 29, 2011 | ETFs Mentioned:

Today saw markets hold their ground after yesterday’s strong performance. The day finished out with the Dow adding 32 points and the S&P 500 jumping 0.22%. 10 year bonds saw a healthy jump of nearly 2%, giving investors hope that the positive figures that have been rolling in for the U.S. are starting to piece the economy back together. Gold saw another day of correlation, as it returned 0.12% for investors who are growing tired of watching the precious metal move in tandem with equities. Crude oil was one of the biggest commodity stories, as the fossil fuel tacked on roughly $1.34 per barrel as it inches back towards the triple digit mark [see also Gold And Silver In A Correlation Bubble?].

To see markets simply hold their ground was a positive sign for the day, as the massive gains on Monday prompted many to brace for a correction in the form of a Tuesday sell-off. But with talks still going strong for European leaders, markets held steady to finish up for a second consecutive day. The biggest news on the day came from a spike in consumer confidence which suggests that our economy may be on the verge of a healthy breakout. It seems like the only thing standing in our way is Europe, which is unfortunately out of our control. As long as the news remains positive overseas look for the U.S. economy to make steady strides. Below, we outline two of the most notable ETF performances on the day [see also Back To Basics: 7 ETFs For Long-Term Investors].

One of the biggest ETF winners on the day came from the Energy Select Sector SPDR (XLE) which jumped 1.43% in Tuesday’s trading. This fund  tracks the largest U.S. companies that engage in oil industry including Exxon Mobil, Chevron, and many others. XLE was able to profit from a healthy jump in crude prices today, which was caused by overseas tensions. More protests broke out in Iran today and they have many investors worried about a production snag. “If Iranian oil exports disappear, other OPEC members likely won’t be able to make up for the loss” writes Dan Strumpf. Some analysts have figured that the loss of Libya’s production boosted crude by $20/barrel over the past six months, and with Iran home to significantly more oil, these tensions are especially sensitive [see also Giving Thanks: Ten Reasons ETFs Are Better Than Mutual Funds].

One of the biggest ETF losers came from the S&P 500 VIX Short-Term Futures ETN (VXX). The volatility product dipped by approximately 2% on the day, though the fund is still up a staggering 124% over the trailing six month period. VXX’s losses were likely brought on by the robust consumer confidence report. The previous period saw that figure come in at 40.9 with a forecast of 44.0 for today’s report. Instead, consumer confidence shattered all expectations with a score of 56 for the month of November. This data points to a more positive outlook on our economy after a rough couple of months. With unemployment figures late in the week, the U.S. economy will remain in the limelight as we enter into December [see also Kitchen Sink ETFdb Portfolio Now Available].

Disclosure: No positions at time of writing.