Daily ETF Roundup: XLF Jumps On U.S. Data, GLD Slumps On Profit Taking

by on December 22, 2011 | ETFs Mentioned:

Equity markets charged higher on Thursday, recouping losses from yesterday, as optimism swept over Wall Street following better-than-expected jobless claims data. The Nasdaq and the S&P 500 Index tied, both gaining 0.83% on the day, while the Dow Jones Industrial Average lagged behind, clinching gains of 0.51%. Gold futures drifted lower amidst the holiday cheer, settling near $1,605 an ounce as the trading session drew to a close. Crude oil on the the other hand crept higher alongside equities, finishing the day right around $99.50 a barrel.

Employment data on the home front struck a positive chord with investors as the number of people applying for unemployment benefits in the U.S. dropped to 364,000, the lowest level since April 2008 [see also ETFs To Invest Like Ron Paul]. “The underlying story here, we think, is that businesses were braced in the fall for a weakening in demand — implied by plunging consumer confidence — which did not then happen. Robust sales growth has therefore left many firms in a better position than they expected, so layoffs are falling,” commented Ian Shepherdson, chief U.S. economist with High Frequency Economics.

The State Street Financial Select Sector SPDR (XLF) was one of the biggest winners, gaining 2.11% on the day. Financial stocks led the way higher as investors jumped into equity markets after better-than-expected jobless claims data. U.S. consumer sentiment also beat analyst expectations, further paving the way higher for domestic indexes as confidence in the economic recovery improved [see Tax Loss Harvesting With ETFs: 6 Ideas To Lower Client Liabilities]. 

The State Street SPDR Gold Trust (GLD) was one of the worst performers, losing 0.71% on the day. Gold futures slumped after investors took profits from the safe haven metal as improving confidence in the U.S. economic recovery painted a less-gloomy outlook for equity markets. Despite ongoing drama in the Euro zone, futures prices have drifted sideways with a downward bias over the past week, with many investors liquidating their gold holdings in an effort to raise cash in case debt woes intensify [see Are Gold ETFs The Best Defense Against Euro Drama?].

Disclosure: No positions at time of writing.