Metals and Crude Fuel ETF, Stock Rise (Daily ETF Wrap-Up)

Published Sept. 8, 2009 at 4:00 a.m.

Market Wrap-Up

Gold and energy prices surged on Tuesday on a mostly positive day for stocks and exchange-traded funds.

Stocks retained modest gains at the Tuesday afternoon close starting a holiday-shortened week with a dose of worldwide optimism spurred by a weekend global promise by G-20 finance ministers to ensure liquidity. The Dow Jones Industrial Average finished up 56 to 9497. The Nasdaq climbed 19 to 2038, and the S&P 500 picked up 9 at 1025.

"The stock market is fine as long as the economy and earnings hold up. The challenge will be rising inflation and interest rates," said Hugh Johnson, chairman of Johnson Illington Advisors.

There also wasKraft Foods' (KFT) $16.7 billion cash-and-stock bid for Cadbury (CBY), which in U.S. shares is valued at $48.79 a share. Cadbury rejected the bid saying the offer "fundamentally undervalues" the maker of Dairy Milk chocolate. Analysts said Kraft may raise its offer, and a joint offer from Nestle and Hershey (HSY) also is considered a possibility. Also on the deal front, Deutsche Telekom (DT) and France Telecom (FTE) said they would merge their British mobile phone operations into a single firm.

Oil prices rose ahead of Thursday scheduled meeting of OPEC ministers in which production levels were forecasted to remain constant. Crude futures traded on the Nymex were up 11 cents at $72.21 in afternoon trading.
For a detailed rundown on Tuesday’s trading session see our market story. 

Winners

The surge in oil prices after comments that OPEC would not change production quotas at its Thursday meeting of energy ministers pushed the United States of Oil fund (USO) up 5.2%. Big moves in gold and silver pushed the SPDR S&P Metals & Mining fund(XME) up 4.1%.

Losers

The upward market swing left investors in the iPath Exchange S&P 500 VIX Short-Term Futures Index fund(VXX) on the wrong side of the trade as shares declined 3.4%. Investors returning to equities knocked the iShares Barclays 20+ Year Treasury Bond fund (TLT) down 0.7%, one of the biggest decliners among ETFs without a short bias.

Wednesday’s Notebook

Earnings and Conference Calls
John Wiley & Sons, Korn/Ferry International, Lakeland Industries, Mediware Information Systems, Men's Wearhouse, Metorex, Ocean Power Technologies, Piedmont Natural Gas, Rex Stores, Shuffle Master, Signet Jewelers, Spartech, Streamline Health Solutions, Talbots, United Natural Foods, Zale

Economic Data
7:00 a.m. MBA Purchase Applications
10:00 a.m. Quarterly Services Survey
2:00 p.m. Beige Book

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