ETF Trends
ETF Trends

Exchange traded funds (ETFs) started out slightly higher on Thursday as investors absorbed a drop in U.S. jobless claims, retailers’ same-store-sales results for March and a rate hike from the European Central Bank.

  • Fewer people applied for unemployment benefits last week, a sign that layoffs are dropping and employers may be hiring more workers. The Labor Department said Thursday the number of people seeking benefits dropped 10,000 to 382,000 in the week ending April 2. That’s the third drop in four weeks. The four-week average of applications, a less volatile measure, declined to 389,500. The average is just 1,000 above a two-year low that was reached three weeks ago. “Businesses are hiring, perhaps not at lightning speed, but they are hiring,” Jennifer Lee, an economist at BMO Capital Markets, said. “And the jobless rate is inching lower. We’re nowhere near `normal’ but we’re taking steps in the right direction.” The iShares Russell 2000 Index (NYSEArca: IWM) is marginally higher so far today.
  • Shoppers shrugged off higher gas prices and cool temperatures to give retailers a surprisingly strong March. The retail revenue figures released Thursday extend the streak of solid spending from late last year and indicate that recent job growth is tempering worries about higher pump prices. A broad range of stores from Costco Wholesale Corp. to Victoria’s Secret parent company Limited Brands Inc. reported revenue gains that handily beat Wall Street expectations. Target Corp. reported a smaller decline than Wall Street expected. “Neither the lack of the Easter Bunny, nor cool temperatures or spiking gas prices could keep consumers at bay,” said Ken Perkins, president of RetailMetrics LLC, a research firm. “There is still a significant amount of pent-up demand. I think the job recovery is catching on.” The SPDR S&P Retail ETF (NYSEArca: XRT) rose over 1% in early trading.
  • For the first time since 2008, crude-oil futures edged up Thursday to break through the $109-a-barrel level. Light, sweet crude for May delivery rose 31 cents to $109.14 a barrel. Traders weighed the fighting in Libya and a weaker dollar against concerns rising fuel costs could undermine U.S. economic growth and demand for crude. “The war in Libya and unrest in the Middle East are pushing oil prices up further and further,” said analysts at Commerzbank in Frankfurt. Crude has traded near $108 this week as traders mull the impact of Libya’s civil conflict, a weakening U.S. dollar and China’s fourth interest rate hike since October. Investors are also concerned that a 29 percent jump in oil prices since mid-February will force consumers to spend more on fuel costs and will eventually undermine crude demand. The ProShares Ultra DJ-UBS Crude Oil ETF (NYSEArca: UCO) gained over 1% early 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.