Earnings Optimism Boost ETFs

March 24th at 2:50pm by Tom Lydon

Exchange traded funds (ETFs) advanced on Thursday as optimism about upcoming earnings and investor buying of the quarter’s top performers lifted the S&P 500 above a key technical level.

  • Oracle Corp. and Research In Motion Ltd. will be in the late-trading spotlight Thursday, with each of the technology producers expected to post a jump in both quarterly profit and sales. “Earnings are the support, and why the market is going up beyond all odds. You know two weeks from now there will be some really good news coming,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald. The Direxion Daily Semiconductor Bull 3X Shares ETF (NYSEArca: SOXL) exploded up 7.37% today.
  • Just on the day EU leaders were hoping to present the final version of their plan to solve the region’s debt crisis; their summit in Brussels was overwhelmed Thursday by debate over Portugal’s political crisis and Ireland’s banking woes. The meeting was supposed to be the event where governments signed off on closer economic cooperation and an overhaul of the size and powers of the region’s bailout funds. Instead, all the focus turned to whether Portugal will take a bailout and how Ireland will cope with its banks’ losses. Most analysts believe an international rescue is only a matter of time, as the EU’s bailout fund is ready to be tapped. The SPDR Euro Stoxx 50 ETF (NYSEArca: FEZ) gained approx. 1% in early trading.
  • Crude-oil futures settled modestly lower Thursday after hitting $106.69 a barrel, with worries about the Middle East and North Africa and the political crisis in Portugal still on investors’ minds. “It’s going to ebb and flow; people are going to take profits,” said Jim Ritterbusch, president of Ritterbusch and Associates in Illinois. The SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP) ended the day flat.
  • Gold futures fell, slipping out of record-breaking territory after hitting an intraday record high. Gold settled at a record high on Wednesday, its third so far this year, finishing the day at $1,438 an ounce. But the recent high has not brought record open interest in gold, and the rollover from the April contract to the June one underway will add to the market’s volatility, George Gero, a vice president at RBC Wealth Management, said in e-mailed comments. Despite the wobble late Thursday, gold is well supported by fundamentals at least through the first half of the year, said Tom Pawlicki, an analyst with MF Global. The Market Vectors Gold Miners ETF (NYSEArca: GDX) closed down slightly on Thursday.

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.