Despite ongoing worries across much of the Middle East and a surging price for crude oil , American equity markets trended higher in Monday trading. The broad S&P 500 led the way on the upside, posting gains of 0.8% compared to a 0.6% jump in the Dow and a 0.5% rise in the tech-heavy Nasdaq. Oil markets were the main focus as traders bid up the price of the important commodity in light of ongoing tensions in Egypt, pushing the price of oil up close to $3/bbl or roughly 3.1% in the trading session. A variety of other commodities also surged on the day as the U.S. dollar slumped, pushing everything from livestock to grains higher for the session.
One of the biggest ETF gainers on the day was the Energy Select Sector SPDR (XLE) which rose by 2.8% during Monday trading. Energy firms were boosted by a robust report from ExxonMobil (XOM) in which the oil giant said that its earnings rose 53% in the fourth quarter. The company posted a profit of $9.25 billion on revenues of $105.19 billion, beating estimates which called for roughly $99.11 billion in revenues. The report boosted shares of XOM by $1.70 on the day, pushing it up past the $80 mark and into 52-week high territory. The news also pushed up a variety of other firms in the sector which are reporting later on in the week as traders looked to get in ahead of these likely to be optimistic reports. As a result, XLE had a banner day on volume that was more than 10 million shares higher than the daily average as pretty much every energy company gained on the day [see holdings of XLE here].
One of the biggest losers in the ETFdb 60 was the Homebuilder SPDR (XHB) from State Street which tumbled by 0.8% on the day. Today’s losses came thanks to continued weakness in the housing market as the percentage of empty private homes rose to 2.7% from its 2.5% reading at the end of the third quarter. Meanwhile, rental vacancies fell by nearly a full percentage point to 9.4% suggesting that people are continuing to prefer renting over home ownership despite a mildly improving economy and ultra-low interest rates. This gloom helped to further sink XHB which was already suffering from several weak earnings reports last week in some of the fund’s top components. “I think 2011 will be a marginal weak year in the homebuilding industry,” D.R. Horton Chief Executive Officer Donald Tomnitz said during a conference call. “Our goal is still to be profitable in 2011 and we’re going to struggle more in ‘11 than we did in ‘10 to be profitable.’’ [see charts of XHB here].
Disclosure: Eric is long XOM