Unrest in Egypt Has Mixed Impact on ETFs

January 31st at 8:30am by Tom Lydon

Exchange traded funds (ETFs) this morning are largely misex as investors weighed concerns over growing unrest in Egypt against optimism over relatively positive economic data and robust corporate earnings thus far.

  • U.S. consumer spending rose more than expected in December to post the sixth straight month of gains as households drew down on their savings to fund purchases, government data showed on Monday. The Commerce Department said spending increased 0.7% after rising by 0.3% in November. PowerShares Dynamic Retail (NYSEArca: PMR) is up slightly this morning.
  • European stocks fell on Monday as political unrest in Egypt pushed down the share prices of oil majors and travel groups, traders said. “The sell-off that we saw on Friday has continued, with investors fleeing to more risk adverse assets,” said Will Hedden, a trader at IG Index. WisdomTree Middle East Dividend (NYSEArca: GULF) is down nearly 2% this morning as protests grow; Egypt stocks are 10% of the fund.
  • Stock markets in Asia mostly fell on Monday as traders grew increasingly worried about unrest in Egypt and oil prices hovered just below the $100 a barrel mark. Share prices partly lost ground on last week’s sharp falls on Wall Street. However, resource stocks gained on higher prices for oil and gold. The Direxion Daily China Bull 3X Shares ETF (NYSEArca: CZM) is up more than 3% in early trading today.
  • Early corporate results Monday had oil giant Exxon Mobil Corp. (NYSE: XOM) shares up  1% after reporting a larger-than-anticipated jump in quarterly profit. Exxon Mobil Corp.’s fourth-quarter earnings surged 53% as the oil giant benefited from higher oil prices, improved refining margins and its unconventional-gas-production operations. iShares Dow Jones U.S. Energy (NYSEArca: IYE) is up 1.5% so far today; Exxon stock is 24.5% of the fund.
  • Massey Energy Co. (NYSE: MEE) shares rallied Monday, surging after Alpha Natural Resources Inc. agreed to buy the metallurgical coal producer at a premium in a cash-and-stock deal valued at $8.5 billion, less than a year after an explosion at a Massey mine killed 29 workers. Shares of the Richmond, Va.-based company jumped more than 10% in early trading. Market Vectors Coal (NYSEArca: KOL) is up 2% so far today; Massey is 5% of the ETF.

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.