Daily ETF Roundup: UUP Preys On Euro, XLE Tanks On Oil’s Dip

by on March 2, 2012 | ETFs Mentioned:

Today capped off a rather strong week on a rather sour note. The Dow was able to end flat, while the S&P 500 sank 0.3%. Despite its losses, the S&P posted its third consecutive weekly gain as well as its eighth winning week out of the past nine. This week was primarily focused on U.S. data, which came in strong by most accounts, but Friday’s sell-off did well to dampen gains made in earlier sessions. Commodities were in heavy focus this week, as these assets presented some of the most significant movements of any investment [see also 12 High-Yielding Commodities For 2012].

Wednesday saw gold dip by roughly $100/oz. and the precious metal was unable to find its way higher, as it closed the week out around $1,713/oz. Silver saw similar losses, creating a buying opportunity for bargain hunters searching through the commodities space for the most enticing deals. Perhaps the most talked about commodity of the week was crude oil, whose price has been skyrocketing since late last year. Friday finally saw some relief, as the fossil fuel lobbed off more than 2% of its underlying price. In an effort to keep our investors up to date on all of the latest happenings in the financial world, we outline two most significant ETF performances on the day [see also Why Warren Buffett Hates Gold].

One of the biggest ETF winners on the day was the DB USD Index Bullish (UUP), which is composed of long USDX futures contracts. The dollar was able to make significant gains today on both the weak yen and weak euro. In fact, the dollar climbed to a 9 month high vs. the yen “with the Bank of Japan seen focused on monetary easing, a policy that could weaken the yen and alleviate the need for direct intervention in currency markets” writes Reuters. Today saw the euro lose just under 1% against the dollar, as the currency sits around 1.319 in comparison to the greenback. When all was said and done, UUP jumped 0.7% on the day [see also Five ETFs George Washington Probably Would Have Liked].

One of the biggest ETF losers on the day was the Energy Select Sector SPDR (XLE), which surrendered 1.1% in the session. XLE is designed to track the largest energy companies in the country, with big names like Exxon Mobil and Chevron accounting for its top holdings. As such, today’s steep crude oil losses hit XLE hard. Crude’s demise came “as fears of a supply disruption in Saudi Arabia eased and broader markets pulled back” writes Dow Jones Newswires. The rapid appreciation of crude oil and subsequent gas prices have largely come from supply fears due to conflicts in the Middle East. If this trend of stability continues, look for crude and this ETF alike to continue to slide [see also Crude Oil Guide: Brent Vs. WTI, What’s The Difference?].

Disclosure: No positions at time of writing.