Steel and materials sector-related exchange traded funds jumped Wednesday after Bank of America/Merrill Lynch upgraded United States Steel (NYSE: X) and Nucor (NYSE: NUE) to better-than-expected guidance.
Among the best performing ETFs of Wednesday, the VanEck Vectors Steel ETF (NYSEArca: SLX) rose 3.9% and was testing its short-term, 50-day simple moving average. SLX includes a 7.0% tilt toward NUE and 4.6% X.
Meanwhile, the SPDR Metals & Mining ETF (NYSEArca: XME), which includes a 50.5% weight in steel industry, increased 4.0% on Wednesday. The broader Materials Select Sector SPDR (NYSEArca: XLB), which has a 11.9% positions in metals and mining, was 0.9% higher.
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The steel industry rallied after Nucor announced strong guidance for the 2016 second quarter.
“The performance of the steel mills segment in the second quarter of 2016 is expected to be much improved compared to the first quarter of 2016 due to higher average selling prices and improved volumes,” Nucor said in a statement.
[related_stories]Nucor is enjoying increased net income, solid financial position with reasonable debt levels, solid stock price performance and growth in earnings per share, reports Rachel Graf for TheStreet.