Daily ETF Roundup: UNG Jumps On Cold Weather, XHB Falls Despite Upbeat Housing Data

by on January 20, 2012 | ETFs Mentioned:

Today marks the end of a major earnings week with stocks managing to finish out the day relatively flat. The S&P 500 finished up by less than a point, while the Dow tacked on 96 points for the session. Today’s flat finish means that the S&P will close out a week above 1,300 for the first time in nearly six months, sparking some investor confidence across the board. Though this trading week was shortened by the Martin Luther King Jr. holiday, the S&P 500 was still able to gain 2% in the four open days on the week. As for commodities, Friday saw gold continue its steady rise as the precious metal is now above $1,660/oz. Oil, on the other hand, lost over 2% to finish just over $98/barrel [see also Three Reasons Why Gold Is Overvalued].

Earnings were the highlight of the week, as a number of major financial institutions released announcements with a mixed bag of results. Companies like Citigroup were off their marks, but others like Wells Fargo, Goldman Sachs, and Bank of America beat the Street. Other notable losers came from Google and General Electric who both disappointed analysts and investors alike. Next week only sees the fire get hotter with companies like Apple, McDonald’s, and Verizon all slated report in the coming days. For now, we outline two of the most notable ETF performance on the day to help keep investors up to date during these fast-paced times [see also Five Juicy High Yield Bond ETFs For 2012].

One of the biggest ETF winners on the day came from the dreaded United States Natural Gas Fund LP (UNG), which jumped by 1.2% to close out the week. Today’s gains were attributable to cooler temperatures across the states, but it appears that this rally will be short-lived. “As benchmark gas futures plummet to their lowest level in nearly a decade, analysts are considering the prospect that prices could actually turn negative as utilities and traders scramble to sell off surplus gas supplies held in storage caverns to avoid hefty contractual fines” writes Edward McAllister. With explorers finding a wealth of supplies in recent weeks, UNG has already lost 22% on the year [see also 25 Ways To Invest In Natural Gas].


One of the biggest ETF losers on the day came from the SPDR Homebuilders ETF (XHB). This fund dropped 2.6% on the day due to a less-than expected rise in housing figures this week. Though some data came in strong, like the 5% increase in existing home sales for last month, housing starts fell, leading many to believe that the recovery of the housing market is still on a long and sluggish path. But despite today’s woes, the future seems bright. “Inventory levels continued their slow improvement, falling to 2.38 million in December from 2.38 million in November. That’s the lowest inventory level since March 2005″ writes Jim J. Jubak. For those who feel that the housing market has a great upside, now may be a good time to get in on the cheap [see also ETF Insider: Euro Woes Weigh On Earnings].


Disclosure: No positions at time of writing.