The markets and exchange traded funds (ETFs) are searching for direction this morning. All signs are there that the economy is indeed improving, but nerves are still frayed by yesterday’s activity.

Private employers stepped up job creation in April, expanding payrolls by 231,000, the strongest surge since March 2006. With another 66,000 temporary government jobs created to conduct the census, the total for April settled at 290,000. However, with more jobs available, 805,000 job-seekers returned to their search for work, causing the unemployment rate to rise 0.2% to 9.9% overall. [5 ETFs to Play the Recovery.]

As the euro stabilizes at $1.2761 after a steep decline on eurozone debt fears, oil hovers at $77. Plunging global stock prices have weighed heavily on crude prices recently, but with recovery on the horizon, demand for crude could steadily increase. [ETFs to Hedge Inflationary Risks.]

  • United States Oil Fund (NYSEArca: USO)

AIG (NYSE: AIG) posted a first-quarter profit of 3.1% with shares at $37.89 in pre-market trading, an increase of 23% this year through the close. It was the insurers third quarterly profit since 2007. The company also announced  asset-sales transactions of $51 billion that are expected to close by year-end, allowing AIG to pay down a portion of its debt. [Why Some Are Bullish on Financial ETFs.]

  • SPDR KBW Insurance (NYSEArca: KIE)

Gold has again reached $1,200 as investors crave safety while U. S. equities are declining sharply. Gold was up $3.10, or 0.3% to $1,200.40 an ounce on the Comex division of the New York Mercantile Exchange.

  • ETF Securities Physical Swiss Gold Shares (NYSEArca: SGOL)

Aaron Hurst 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.