Taking Stock of Commodities

Commodities, as measured by the Dow Jones-AIG Commodity Index, have gained a shade over 7 percent in the past 12 months. Compared with the S&P 500's contemporaneous 10 percent return, futures are poking along—thankyouverymuch—but aren't any great shakes.

Ahh, but you need to take stock of commodities in another way ...

CME Group Inc., proprietors of the Chicago Mercantile Exchange and the Chicago Board of Trade, announced third-quarter earnings Wednesday. A doozy of a number it was, too. Earnings rose 94 percent, largely due to the Merc's $11.9 billion acquisition of the Board, its long-time cross-town rival, earlier this year.

Profits for the combined operation blew well past Wall Street forecasts, giving traders reason to bid up CME shares more than $15, or 2.4 percent on the day. In the past 12 months, the stock has climbed 34 percent.

That's a better track record than that of many commodities traded on the Group's two bourses.

When it comes to price run-ups, though, the Intercontinental Exchange puts CME on ICE.

ICE's financial results were announced Thursday. Percentagewise, ICE's earnings weren't the stunner that CME's were. IntercontinentalExchange Holdings Inc., which acquired the New York Board of Trade in January, posted a 53 percent year-over-year uptick in third-quarter profits. ICE, like CME, bettered Street earnings predictions by a substantial margin.

You'd think, given what traders did to CME shares, that ICE shares would have been boosted by this news. You'd think, but you'd be wrong.

In fact, ICE share fell more than 3.9 percent by the close Thursday. The sell-off was partly due to ICE's announcement that licensing costs for its Russell index futures would be three times higher than previously forecast, squeezing the margins on its exclusive deal with the index provider.

Another reason for the sell-off may just have been the old "buy on the rumor, sell on the fact" gambit. On Wednesday, ahead of the earnings release, ICE shares jumped nearly $7, or 4.1 percent, to hit an all-time high.

All told, the company's share price has increased a whopping 98 percent over the past 12 months. Now, how's that for ICE'ing (ahem) the cake?