ETFChannel.com Weekly Newsletter
Fri, Jul 23, 2:52 PM ET, by ETFChannel.com
Equity markets ended the week higher on solid earnings, while the new financial reform bill unexpectedly halted new bond issuance.
ETFs
The Steel ETF (SLX) outperformed other ETFs this week, up about 12.3%. Components of that ETF showing particular strength this week include shares of Universal Stainless & Alloy (USAP), up about 24.9% and shares of Mechel (MTL), up about 20.5% on the week.
And underperforming other ETFs this week is the iShares Dow Jones U.S. Healthcare Providers Index Fund ETF (IHF), down about 2.6% this week. Among components of that ETF with the weakest showing for the week were shares of Medco Health Solutions (MHS), lower by about 13.4%, and shares of Gentiva Health Services (GTIV), lower by about 12% on the week.
Other ETF standouts this week include the Coal ETF (KOL), outperforming this week with a 11.1% gain. And the Pharmaceutical HOLDRS (PPH) was an underperformer, falling about 1.8% this week.
MARKET SUMMARY
Equity markets closed higher for the week. The SPDR S&P 500 ETF (SPY) is higher by approximately 3.4% for the week, the PowerShares QQQ (QQQQ) is up more than 3.5% and the SPDR DJ Industrial Average ETF (DIA) is up about 3.25% for the week.
OIL
Crude oil futures surged higher for the week, trading just under $79 a barrel on Friday afternoon.
GOLD
Gold futures were slightly higher for the week, selling for $1,192 an ounce on Friday afternoon.
ECONOMIC NEWS
On the economic front, housing starts came out on Tuesday disappointing investors with a 549,000 annualized rate for June. Analysts were expecting a 580,000 annual rate.
Existing home sales for June came in at an annualized rate of 5.37 million on Thursday, down sharply from the 5.66 million sales rate reported for May. Observers were expecting a 5.26 million sales number.
Also on Thursday, the Conference Board’s Leading Economic Indicators index met the consensus estimate of a 0.2 percent loss.
FINANCIAL REFORM ROILS BONDS
President Obama signed a far-reaching financial reform bill on Thursday. The bill has already created unintended consequences with ratings agencies S&P, Moody's, and Fitch refusing to let bond issuers use their ratings pending a review of legal exposure caused by enactment of the law. The new law makes firms liable for the quality of their ratings, effective immediately. The bond market shut down on Thursday, at least temporarily, as a result of the new law. Ford (F) was forced to cancel plans to issue new debt yesterday.
EARNINGS
Earnings season was in full swing this week with over 500 companies reporting second quarter earnings.
IBM (IBM) posted profits of $2.61 per share after the market close on Monday, beating the consensus by 3 cents. Analysts were expecting $2.58 per share.
On Tuesday, Peabody Energy (BTU) reported 71 cents per share in second quarter earnings and beating the street by 5 cents.
Also on Tuesday, Apple (AAPL) reported earnings per share of $3.51, soundly beating analyst estimates of $2.84.
UnitedHealth Group (UNH) beat forecasts by 24 cents on Tuesday, reporting 99 cents per share in earnings. Analysts were expecting 73 cents per share.
Morgan Stanley (MS) reported profits on Wednesday of 80 cents per share. The consensus estimate was 74 cents.
On Thursday, Microsoft (MSFT) posted 51 cents per share in profits. Analysts were expecting 46 cents per share for the second quarter.
SDI Glossary: "Analyst" Definition
SDI Glossary: "Earnings" Definition
SDI Glossary: "Equity" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "Indicator" Definition
SDI Glossary: "iShares" Definition
SDI Glossary: "NI" Definition
SDI Glossary: "ROI" Definition
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