ETFs On the Move Following Earnings News

January 11th at 8:30am by Tom Lydon

After yesterday’s decline, exchange traded funds (ETFs) are rebounding this morning on earnings-related optimism. The markets also reacted well to reports that Japan joined China in saying it plans to buy bonds issued by Europe’s financial-aid fund.

  • European markets show modest gains Tuesday after spiking higher in the wake of Japan’s pledge to buy debt to be issued by the European Financial Stability Facility later this month and the European Central Bank was said to be again purchasing Portuguese government bonds, according to Dow Jones Newswires. Japan is considering a purchase of more than 20% of the total amount on offer. SPDR Barclays Capital International Treasury Bond (NYSEArca: BWX) is down 0.5% in early trading.
  • Buoyed by stronger aluminum prices and cost savings, Alcoa late Monday swung to a fourth-quarter profit and projected global demand for the metal will double by 2020. Alcoa’s (NYSE: AA) shares are down 1.5% even though  results beat Wall Street’s targets and marked the company’s highest quarterly sales and profit since the economic downturn forced the company to slash spending and curb output.  Global X Aluminum (NYSEArca: ALUM) is up only slightly in response; Alcoa is 10% of the fund.
  • In another signal that luxury shoppers are back, Tiffany & Co. (NYSE: TIF) lifted its full-year profit forecast Tuesday as worldwide demand led to better-than-expected holiday sales for the high-end jewelry retailer. The New York-based company sees sales of nearly $3.1 billion, compared with its prior outlook of $3.03 billion. SPDR S&P Retail (NYSEArca: XRT) is down nearly 1% this morning; Tiffany is 1.5%.
  • Shares of Lennar Corp. (NYSE: LEN) added nearly 7% in the early going Tuesday after the homebuilder reported a quarterly profit of 17 cents a share, beating the consensus estimate of 2 cents a share. “The headline number looks quite good,” Ticonderoga Securities said in a note. “ iShares Dow Jones U.S. Home Construction (NYSEArca: ITB) is up nearly 2% this morning; Lennar is 7% of the fund.

Gregory A. Clay contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.