Mixed News on Factories, Home Sales Send ETFs Lower

January 5th at 10:00am by Tom Lydon

ETF UpdateStocks and exchange traded funds (ETFs) were a sent slightly lower this morning after mixed reports on the U.S. economy. Factory orders for December were up, however pending home sales in November plunged. 

U.S. factory orders rose a more than forecast 1.1% in November, led by gains in demand for business equipment that indicate that companies are boosting spending and production to rebuild inventories. Excluding transportation demand, which tends to be volatile, orders climbed 1.9% – the biggest gain since June, reports Bob Willis and Courtney Schlisserman for Bloomberg.

Pending home sales plunged a seasonally adjusted 16% in November as the highly popular tax credit for first-time home buyers was set to expire. However, the pending sales index – which measures contracts signed but not closed on previously owned homes – was 15.5% higher than in November 2008, reported Rex Nutting for MarketWatch. [For more stories on the housing industry, see our homebuilders category.] The iShares Dow Jones U.S. Home Construction Index Fund (NYSE: ITB) is lower by nearly 1% this morning.

The stock of Continental Airlines (NYSE: CAL) rose to its highest in almost a year (soaring higher by more than 12% today), leading a rally among airline stocks, after reporting that December unit revenue fell the least in 11 months. Mary Jane Credeur and Mary Schlangenstein for Bloomberg report that its passenger traffic last month increased 6.3%, the largest gain since September. [For more stories on the airline sector, see our airlines category.] The Claymore/NYSE Arca Airline ETF (NYSE: FAA) has flown higher by more than 5.5% this morning.

Gold rose again this morning, leading other precious metals higher and extending its biggest gain in two months. Gold continues to be boosted by near-zero interest rates and a weak U.S. dollar. The U.S. dollar index fell today to a two-week low, report Nicholas Larkin and Kim Kyoungwha for Bloomberg. [For more stories on gold, see our gold category.] The biggest exchange traded fund backed by bullion – the SPDR Gold Trust (NYSE: GLD) is up fractionally this morning.

Tony D’Altorio contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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