Thursday ETF Roundup: XHB Soars On Housing Data, GLD Continues To Sink

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Includes: GLD, XHB
by: Stoyan Bojinov

Domestic equity markets staged a solid comeback today following yesterday’s dismal sell-off. Better-than-expected housing market data bolstered markets higher on the second to last trading day of the year; the Dow Jones Industrial Average led the way higher, gaining 1.12% on the day, while the Nasdaq lagged behind, posting a gain of 0.90%. Upbeat economic data on the home front sent gold lower for the third day in a row this week, while crude oil climbed higher alongside equity markets. Prices for the precious metal and fossil fuel closed near $1,550 an ounce and $99.70 a barrel, respectively.

Stocks on Wall Street bounced higher on Thursday as positive economic data gave traders a good reason to recoup losses from yesterday. Optimism was further bolstered on news that Lowe’s bough online home-improvement retailer ATG Stores to expand its Internet presence. Industrial and financial stocks charged ahead of the pack as Chicago PMI data came in better-than-expected. Investor confidence in domestic stock markets improved considerably as the S&P 500 Volatility Index (VIX) dropped close to 4%, settling below the 23 mark for the day.

The State Street SPDR Homebuilders ETF (NYSEARCA:XHB) was one of the best performers on the day, gaining 3.60%, following surprisingly good U.S. housing market data. The National Association of Realtors reported that pending home sales rose 7.3% in November, sailing past analyst expectations. Despite a string of better-than-expected U.S. housing market data releases, XHB has endured rocky times in 2011 as a whole. This ETF is just barely in negative territory in terms of year-to-date performance.

The State Street SPDR Gold Trust (NYSEARCA:GLD) was one of the most notable losers on the day, shedding 0.46%, as gold prices tumbled for the third consecutive trading session this week. Futures prices for the precious yellow metal dipped as low as $1,523 an ounce mid-day, although buyers stepped in and pushed the price near $1,550 an ounce as the trading session drew to a close. Seth Rabinowitz, who covers commodities as a partner at Silicon Associates, commented that traders are likely “liquidating their gold positions before year end, locking in last-minute profits in a mad rush to raise capital ahead of the last 2011 market close."

Disclosure: No positions at time of writing.

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