ETFs Remain Flat on Economic Uncertainty

ETFs are flat on Thursday after a round of economic data illustrated an unexpected drop in weekly jobless claims and the first rise in housing starts in three months.

  • The number of people filing for state unemployment benefits for the first time fell to its second lowest level this year, the Labor Department said Thursday. Against a backdrop of what’s been stubbornly high joblessness, initial claims dropped 3,000 to a seasonally adjusted 420,000 last week, marking the third decline in the past four weeks. First-time claims have been on a clear improving trend over the past two months, raising hope that companies will soon hire more workers. 
  • Construction of new U.S. homes remained at a low level in November, while permits for new construction fell. Housing starts rose 3.9% to a seasonally adjusted, annualized rate of 555,000 last month, the Commerce Department reported, however, that’s 5.8% below the year-earlier period. On Wednesday, the National Association of Home Builders reported that builder confidence on new, single-family homes remained at low levels in December. Meanwhile, permits for new construction fell 4% to the lowest level since April 2009.  SPDR S&P Home Builders ETF (NYSEArca: XHB) is up 0.5% in early trading.
  • European markets held in a tight range Thursday as political leaders headed to Brussels for a summit on the region’s sovereign-debt crisis. EU leaders will meet over the next two days to discuss their response to the sovereign-debt crisis, including creating a permanent crisis-resolution mechanism and potentially increasing the current bailout fund. If you’re feeling bullish about what this meeting will produce, check out ProShares Ultra MSCI Europe ETF (NYSEArca: UPV).
  • Asian markets struggled for direction Thursday, as investors worried about eurozone sovereign-debt problems, while Chinese stocks slipped on lingering worries about monetary-policy tightening by Beijing. Standard & Poor’s lifted China’s long-term credit rating to AA-minus from A-plus, saying the government had deftly handled the financial crisis and that a higher rating reflected the nation’s improved fiscal position and growth prospects. The Direxion Daily China Bear 3x Shares ETF (NYSEArca: CZI ) is pointing up this morning.

Gregory A. Clay contributed to this article.

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