Higher Oil Prices Hold Back ETFs | ETF Trends

Exchange traded funds (ETFs) are mixed early Wednesday, casting doubt on any follow-up on the previous session’s gains, as Wall Street marked the second anniversary of the bull market.

  • Applications for home mortgages jumped to the highest level in three months last week, buoyed by improvements in the job market, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 15.5% in the week ended March 4. It was the highest level since the week ended Dec. 10 and was the biggest increase since June 11. The MBA’s seasonally adjusted index of refinancing applications climbed 17.2%, while the gauge of loan requests for home purchases gained 12.5 percent. The iShares Dow Jones U.S. Real Estate ETF (NYSEArca: IYR) is down 0.5% in early trading.
  • Oil prices remained near $105 a barrel Wednesday amid mixed signs about U.S. demand and as fighting continued in Libya between rebels and forces loyal to Moammar Gadhafi. So far, most of Libya’s 1.6 million barrels per day of crude production has shut down, the biggest disruption to oil exports since a wave of political upheaval this year toppled governments in Tunisia and Egypt and sparked violent protests in Algeria, Morocco, Yemen, Oman, Bahrain and Iran. Traders are especially concerned unrest could spread to Saudi Arabia, the world’s largest crude exporter. The United States Gasoline ETF (NYSEArca: UGA) is up about 2% so far today.
  • Treasurys rose as signs of more clashes in Libya spurred demand for safe assets. Investors took advantage of the selling in the previous two sessions to buy bonds at cheaper levels, and traders said Asian central banks were among the buyers. Short-dated notes led the buying, as long-dated maturities face new debt supply. “It is risk-off trade,” said Martin Mitchell, head government bond trader at Stifel Nicolaus & Co. in Baltimore. The Direxion Daily 20+ Year Treasury Bull 3x Share ETF (NYSEArca: TMF) gained about 1.5% early Wednesday.
  • Inventories at U.S. wholesalers rose 1.1% in January, which is slightly stronger than the 1% that had been expected.  This compares with an upwardly revised 1.3% gain in December, the Commerce Department reported Wednesday. Sales of wholesalers rose 3.4% in January, while the inventory-to-sales ratio was 1.13. The ProShares UltraShort Basic Material ETF (NYSEArca: SMN) rose almost 2% on Wednesday.

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.