Upbeat Earnings Propel Oil ETFs | ETF Trends

Positive earnings from Alcoa (NYSE: AA) and CSX (NYSE: CSX) have given investors a reason to believe in the economic recovery and oil exchange traded funds (ETFs) a reason to surge in early trading.

Both Alcoa and CSX notched better-than-expected second-quarter profits, sending the Dow up more than 140 points in early trading. Both companies also reported positive forecasts for the second half. Alcoa is closely watched because its products are used by a wide range of customers and industries, while CSX is eyed because it transports an array of products, says the Associated Press.

  • iShares Dow Jones Transportation Average (NYSEArca: IYT): CSX is 4.9%
  • iPath DJ-UBS Aluminum TR Sub-Index (NYSEArca: JJU)

Other earnings coming up this week include Yum! Brands (NYSE: YUM), Intel (NASDAQ: INTC), Google (NASDAQ: GOOG), Bank of America (NYSE: BAC) and Citigroup (NYSE: C).

Economic optimism usually lends oil prices a hand, and it’s no different this morning. It didn’t hurt that the International Energy Agency also raised its forecast today for 2010 global oil consumption by 2.1%. On the flip side, it predicts less demand next year and – gasp – more stability in oil prices. Oil ETFs of both varieties – futures and equities – are up at least 2%.

  • United States Oil Fund (NYSEArca: USO)
  • PowerShares DB Oil (NYSEArca: DBO)

The trade deficit widened unexpectedly to the highest level in a year and a half, thanks to increasing imports from China. U.S. exports surged 2.4% to a 20-month high while imports increased even more, by 2.9%. There’s one positive to be found in the surge in imports, and that’s that consumer spending on goods and automobiles and business spending remains fairly robust. [As Auto Sales Improve, Play It With This ETF.]

  • SPDR S&P International Consumer Discretionary Sector (NYSEArca: IPD): includes exposure to auto companies like Toyota (NYSE: TOY), Honda (NYSE: HMC), Daimler AG, Hyundai, Nissan and Fiat.
  • Vanguard Consumer Discretionary (NYSEArca: VCR)

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.