Three ETFs To Watch This Week: IYW, XLY, XRT

by on July 16, 2012 | ETFs Mentioned:

Yet another volatile week for stocks as they were finally able to snap their six day losing streak, much to the delight of traders across the nation. With the euro zone still in shambles, and a slowdown threatening the Chinese economy, investors have been digging for good news wherever it can be found. The coming week will kick earnings season into full gear as the biggest companies across the nation detail how they fared in this most recent and volatile quarter. Below, we outline three ETFs that should see a fair amount of activity during the week ahead [see also Warning: Ignore Bill Gross’ Hard Money Prediction At Your Own Risk].

Dow Jones U.S. Technology Index Fund (IYW)

Why IYW Will Be In Focus: IYW aims to measure the performance of the technology sector in the U.S. and will be faced with a vital week, as three of its top five holdings release earnings. Intel, IBM, and Google will report on Tuesday, Wednesday, and Thursday respectively. Together, these three stocks account for more than 20% of IYW’s portfolio, so look for this fund to stay active through out the middle of the week.

Financial Select Sector SPDR (XLF)

Why XLF Will Be In Focus: This fund is one of the most popular in the world, with over $6 billion in assets and an average daily volume just over 64 million. The ETF seeks to replicate the performance of the U.S. financial sector, and it too will see a number of its most significant holdings release earnings statements this week. Bank of America, Citigroup, American Express, and Goldman Sachs are all slated to release Q2 statements in the coming days. Look for XLF to be particularly volatile as bellwether earnings push and pull at its underlying price [see also Why You Need a Preferred Stock ETF].

SPDR S&P Retail ETF (XRT)

Why XRT Will Be In Focus: When it comes to measuring the U.S. retail segment, no fund is as prolific as XRT, which exchanges hands over 6.6 million times per day. Its focus will come early on in the week as the U.S. advanced retail sales figures are released; those numbers are slated to come in at 0.2% versus the previous reading of -0.2%. Should this result disappoint, not only will it mean bad news for this ETF, but traders will take it as a sign of a weakening economy and will likely spark a sell-off. On the flip side of that, a positive report could spark some healthy momentum in both this fund and broad equity benchmarks.

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Disclosure: No positions at time of writing.