Hurricane Gustav spared oil facilities in the Gulf Coast this weekend, easing investor concerns, sending oil prices lower and exchange traded funds (ETFs) higher.
Crude oil fell to $108.77 a barrel in mid-day trading today, reports Tim Pardis of the Associated Press. ETFs leveraging oil have been top performers in trading today. Transportation has been reacting positively to the falling price as well. Energy-related ETFs have dropped along with the price of oil.
Worries in the financial sector were also eased as news that Korea Development Bank is in talks about acquiring Lehman Brothers (LEH).
A report on supply management showed manufacturing activity was down slightly in August, but this was expected, and that inflation slowed.
ETFs reacting to the news today, and their mid-day performance:
- PowerShares DB Crude Oil Double Short ETN (DTO), up 11.6%
- iShares Dow Jones Transportation (IYT), up 1.0%
- iShares Dow Jones U.S. Energy (IYE), down 4.7%
- Financial Select Sector SPDR (XLF), up 1.2%
For full disclosure, some of Tom Lydon’s clients own IYT.
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.