ETFs Retreat On Libyan Fallout | ETF Trends

Exchange traded funds (ETFs) retreated further at the open today as Wall Street struggled to rebound from the market’s sharpest decline in three months. The ongoing unrest in oil-rich Libya isn’t helping matters.

  • Oil prices rose to fresh two-year highs around $96 a barrel Wednesday amid concerns that a violent power struggle in Libya could disrupt supplies, with experts warning the next weeks and months would prove highly volatile. If the chaos spreads to other bigger energy producers in the region, such as Iran or Saudi Arabia, price fluctuations could became as sharp as those in the 1970s, when an OPEC embargo caused gasoline shortages in the U.S., analysts warned. United States Gasoline (NYSEArca: UGA) is up more than 2% today.
  • The dollar slipped against most major rivals on Wednesday, failing to find any safe-haven support as investors watched continued turmoil in the Middle East and North Africa. The dollar’s “lack of safe-haven appeal may be partly explained by the fact that the market is not clearly in a ‘risk-off’ mood,” said Jane Foley, senior currency strategist at Rabobank. “The appeal of commodities, which often underperform during crisis, have been bolstered by expectations of rising demand in the emerging markets and geopolitical events.” PowerShares DB U.S. Dollar Bearish (NYSEArca: UDN) is up 0.6% so far this morning.
  • Sales of existing homes rose a seasonally-adjusted 2.7% in January for the fifth monthly rise in six, a trade group said Wednesday as it also announced a major review into the quality of its data. The National Association of Realtors said sales of existing homes were at a seasonally-adjusted annualized rate of 5.36 million from a downwardly revised 5.22 million in December. Despite the numbers, iShares Dow Jones U.S. Home Construction (NYSEArca: ITB) is down 0.5% this morning.
  • Hewlett-Packard (NYSE: HPQ) on Tuesday reported a 16% jump in net income, as sales rose modestly for its first fiscal quarter. But the high-tech giant also issued a weaker-than-expected outlook that sent its shares tumbling more than 11% in early trading. Slowness in the company’s PC and services units contributed to the shortfall, and disappointed investors who have pushed HP shares up more than 15% since the first of the year. The Internet Architecture HOLDRs (NYSEArca: IAH) is down nearly 2%; HP is 18% of the fund.

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.