An exchange traded fund tracking the Dow was in negative territory Wednesday morning along with McDonald’s (NYSE: MCD), which said its May sales were hit by rising gas prices. Retail ETFs were also weak as Gap (NYSE: GPS) and Abercrombie & Fitch (NYSE: ANF) weighed on the sector.
Oil exchange traded funds followed crude prices higher Wednesday as traders reacted to news of a rocky OPEC meeting that ended abruptly. The member nations were unable to reach consensus to raise production, defying market expectations, according to reports. Crude futures rose above $100 a barrel in morning trade Wednesday. U.S. Oil Fund (NYSEArca: USO) climbed nearly 2% at last check. [Oil ETFs Rise on OPEC Meeting Drama]
Financial ETFs were fractionally lower Wednesday morning along with shares of key components Citigroup (NYSE: C) and Bank of America (NYSE: BAC). Financial Select Sector SPDR Fund (NYSEArca: XLF) slipped 0.2% while Citi and Bank of America both shed nearly 1%. The financial ETF was trading below $15 a share, down from its high of $17.20 set in February. Bank stocks fell sharply along with the overall market late Tuesday after Fed chief Ben Bernanke didn’t offer any hints of additional stimulus after the central bank’s bond-buying program expires later this month. [Financial ETFs Follow Citigroup, Bank of America Lower]
Investors pummeled shares of Ciena (NasdaqGS: CIEN) in Wednesday’s premarket, pushing the stock lower by 13% after the provider of optical networking equipment was out with a disappointing outlook. Ciena announced fiscal-second quarter results that missed analyst expectations. The stock is a nearly 3% holding in iShares S&P North American Technology-Multimedia Networking (NYSEArca: IGN). The ETF is down 11.6% over the past three months, according to Morningstar. It is trading close to its 200-day exponential moving average. [Ciena Outlook Weighs on Networking ETF]
Retail ETFs that have been hit hard by worries over a slowing economy were looking for a boost Wednesday from solid earnings from Ulta Salon, Cosmetics & Fragrance (NasdaqGS: ULTA). The company late Tuesday said first-quarter net sales rose nearly 21% from the year-ago period. The stock represents nearly 3% of PowerShares Dynamic Retail (NYSEArca: PMR). Ulta shares climbed 12% before Wednesday’s bell. Separately, Gap (NYSE: GPS) shares fell 2% in premarket trading Wednesday following a downgrade at Barclays. [Gap, Ulta Salon in Focus in Faltering Retail ETFs]
ETFs that invest in solar energy could see action Wednesday following quarterly results from LDK Solar (NYSE: LDK). The stock weakened after the Chinese company, which produces solar panels, offered a second-quarter sales forecast that fell short of analyst estimates. LDK is a holding in Market Vectors Solar Energy (NYSEArca: KWT), Guggenheim Solar ETF (NYSEArca: TAN) and iShares S&P Global Clean Energy (NasdaqGM: ICLN). A pullback in prices for solar products will hit profit margins at LDK and SunPower (NasdaqGS: SPWRA), the companies said this week, according to Reuters. [Solar Energy ETFs Move on LDK Results]
Hovnanian (NYSE: HOV) reported quarterly earnings late Tuesday, painting a dismal outlook for homebuilder shares and ETFs. The builder lost 69 cents per share, more than analysts were expecting. Wall Street was anticipating a 51 cent loss per share. Hovnanian is anticipating an improved fiscal situation fort he second half of 2011. The losses of the first-time homebuyers’ credit and weak jobs market have affected homebuilders and the real estate market across the board. SPDR S&P Homebuilders ETF (NYSEArca: XHB) dropped 0.5% on Tuesday, and lost 4% over the past 10 days. iShares Dow Jones US Home Construction Index Fund (NYSEArca: ITB) fell 0.8% Tuesday, after trending down 3.5% over the past 10 days. [Hovnarian Paints Weak Picture for Homebuilder ETFs]
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. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.