Equities Rally On Strong Economic Data—Gasoline ETF Booms As Pump Prices Gain

[Chart courtesy of MarketWatch.com]

Strong economic data drove US equities higher today paring yesterday’s losses with the S&P climbing to a near ten-month high. Major indexes are already in the green on the week after investors were greeted with better-than-expected unemployment data on Thursday. A strong report on German economic outlook boosted sentiments further.

The stock markets have performed well so far this year and a little pull-back would ensure that everything’s in place. The Dow Jones Industrial Average rose 0.4 percent after falling as much as 56 points in previous sessions.

Consumer products maker Procter & Gamble led Thursday’s rally as two-thirds of the 30-component Dow were up over the previous day. Other major gainers were IBM (IBM), Disney (DIS) and Travelers (TRV).

Hewlett-Packard was the day’s biggest laggard and shed 6.3 percent after latest fiscal quarter ending on Jan. 31 showed a dramatic 44 percent drop in profits as sales tanked 7 percent.

The S&P 500 added 0.43 percent to end at 1,363.17 with utilities sinking and financial firms gaining the most among the ten major sectors. The NASDAQ composite index snapped a 3-day losing streak to close 23.81 points higher.

Amid fears of a contagion in Europe ensured demand for US seven-year Treasuries remained strong. The bid-to-cover ratio, considered as the barometer of demand, of seven-year notes was recorded at 3.11, compared with a ten-year average of 2.81.

Oil prices for April delivery were up 34 cents at $106.62 a barrel. Crude oil futures at the New York Mercantile Exchange hit the highest level since May last and closed at $107.83, a gain of $1.55, or 1.79 percent.

The US Gasoline Fund (UGA), the only ETF offering exposure to gas, has rallied nearly 23 percent in the last three months.

Elsewhere a number of pharmaceutical and bio-technology related ETFs, including SPDR S&P Biotech ETF (XBI), iShares NASDAQ Biotechnology Index Fund (IBB) and the PowerShares Dynamic Pharmaceuticals Portfolio (PJP) took off after the FDA panel approved its weight-loss drug Qnexa.

Gold futures for April delivery jumped $16 to $1787.30 an ounce on Thursday. Our Trend Tracking Indexes (TTIs) recouped yesterday’s small set back. For more details, please see the updated StatSheet due out later tonight.

Disclosure: Holdings in GLD

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
This entry was posted in Market Review and tagged , , , , . Bookmark the permalink.

Comments are closed.