U.S. stock ETFs were set to open higher Wednesday following a five-day losing streak on weak U.S. jobs data and lingering European debt concerns. Alcoa (NYSE: AA) kicked off the earnings season for Dow components, while sector ETFs could see action as companies announce first-quarter results.
SPDR Dow Jones Industrial Average (NYSEArca: DIA) is down 3.5% the past five days.
The economy may be past its breakout stage of fast-paced earnings growth, and investors are taking a more reserved approach going into new earnings season. Nevertheless, ETF investors may utilize sector funds to capture earnings plays.
Alcoa shares were up 5% in Wednesday’s premarket trading on better-than-expected earnings. The aluminum producer is widely watched as a barometer for economic activity, writes Don Dion for TheStreet.
If you feel more comfortable with a broad play on the overall sector, the SPDR S&P Metals & Mining ETF (NYSEArca: XME) provides a diversified exposure to mining stocks, with a 3% allocation to Alcoa, he notes.
Alcoa has a smaller position in the Dow ETF because the venerable index weights companies by share price. Alcoa is the second-smallest holding at only 0.6% of the portfolio after Bank of America (NYSE: BAC).