ETF Trends
ETF Trends

Stock exchange traded funds (ETFs) edged slightly higher in morning trading Wednesday as markets worldwide remain cautious ahead of Federal Reserve Chairman Ben Bernanke’s first news conference.

  • New orders for long-lasting U.S. manufactured goods rose solidly in March and bookings for the prior month were much stronger than initially thought, pointing to strength in the manufacturing sector. The Commerce Department said on Wednesday durable goods orders increased 2.5 percent after an upwardly revised 0.7 percent rise in February, which was previously reported as a 0.6 percent fall. Economists had expected a 2.0 percent increase in March. Orders last month were buoyed by bookings for motor vehicles, transportation equipment and aircraft. “It’s a pretty solid report. The manufacturing sector remains one of the stronger sectors in the economy while other sectors lag,” said Julia Coronado, chief economist for North America at BNP Paribas in New York. The iShares Dow Jones Transportation Average ETF (NYSEArca: IYT) is benefiting from this news – up almost 1% so far on Wednesday.
  • Standard and Poor’s threatened to cut Japan’s sovereign credit rating again, warning the huge cost of last month’s devastating earthquake will hurt already weak public finances unless bickering politicians can agree to raise taxes. It affirmed its long-term sovereign credit rating on Japan at AA minus — the lowest among the major agencies — but downgraded the outlook to negative from stable. The change comes three months after S&P had cut Japan’s sovereign credit rating — the first reduction since 2002 — saying the government had no plan to deal with its mounting debt while adding the administration’s loss of an upper house majority had compounded the problem. Public debt, already twice the size of the $5 trillion economy, is set to swell as the country faces reconstruction costs following the March 11 earthquake and tsunami that could reach 50 trillion yen ($613 billion), S&P said. The iShares MSCI Japan Index ETF (NYSEArca: EWJ) is down slightly in early trading.
  • Several big companies across Europe on Wednesday reported results that were largely well-received. European stock markets pushed higher in an action-packed Wednesday for investors, with corporate results driving shares of Ericsson AB (SE:ERICB), Volkswagen AG (SE:VOW3) and Renault SA (FR:RNO), while Nokia Corp. (NYSE: NOK) gained on news of job cuts. John Ventre, portfolio manager for Skandia Investment Group, said Europe is benefiting from an upbeat earnings season so far from the U.S. He said some European indexes are nearing crucial highs, with the German DAX 30 index pushing towards the year’s high so far of 7,440, but also said investors will be cautious ahead of key U.S. Federal Reserve events later. Ventre also said the European corporate results season was looking strong. Some well-received results were also helping lift Europe markets. The iShares S&P Europe 350 Index ETF (NYSEArca: IEV) gained almost 1% early 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.