Earnings Trump Unemployment Report (IYJ, FXE, VGK, FXI, SPY)
ETFs we’re watching for Friday, April 20, 2012
Despite a trend of disappointing reports on initial unemployment claims, the three major stock indices made a solid move into positive territory on Friday. A batch of upbeat earnings reports from such companies as GE, Microsoft and Schlumberger (which reported a 38% surge in Q1 earnings) helped the market forget about Thursday’s report on initial unemployment claims.
In China, stocks rallied following a report that the government would maintain liquidity with monetary easing. China’s Shanghai Composite Index jumped by 1.19% to 2,406 (NYSEARCA:FXI).
European stock indices received a boost on Friday after Germany’s Ifo Institute released its business climate index for April, which surprisingly rose to 109.9 from last month’s 109.8, despite economists’ expectations for a decline (NYSEARCA:EWG). Although Spain’s 10-year bond yield rose above 6% for the first time since Monday, enthusiasm apparently sparked by Germany’s business confidence index sent Spain’s IBEX 35 Index skyward by 1.46% to 7,009 (NYSEARCA:EWP).
England’s retail sales rose by 1.8% during March as a result of unusually warm weather (NYSEARCA:EWU).
As of 10:05 EDT, the Euro STOXX 50 Index advanced by 0.69% to 2,300 (NYSEARCA:VGK) and the FTSE 100 rose by 0. 23% to 5,757 (NYSEARCA:EWU). The German DAX Index advanced by 0.80% to 6,724 (NYSEARCA:EWG).
The euro advanced against dollar by 0.56% trading at $1.3212 (NYSEARCA:FXE).
June futures for Brent Crude Oil advanced by 13 cents to $118.13/bbl. (NYSEARCA:USO)
June gold futures declined by $3.00 to $1644.00 per ounce (NYSEARCA:GLD)
In the United States, S&P 500 Index opened exactly at Thursday’s closing level: 1,376. By 10:30, the S&P 500 advanced by 0.61% to 1,385. The Dow gained 98 points (0.76%) to reach 13,062. The Nasdaq Composite advanced by 0.71% to 3,028.
ETF Summary:
iShares Dow Jones US Industrial Sector Index Fund (NYSEARCA:IYJ) +0.96% as upbeat earnings reports offset Thursday’s disappointing unemployment claims report.
iShares FTSI/Xinhua China 25 Index Fund (NYSEARCA:FXI) +1.44% following the report that the Chinese government will maintain liquidity in the nation’s financial system with monetary easing.
Vanguard MSCI Europe ETF (NYSEARCA:VGK) +1.57% as the surprisingly optimistic German business confidence index boosts confidence across the Eurozone.
CurrencyShares Europe Trust ETF (NYSEARCA:FXE) +0.67% as the euro makes a big move against the dollar.
SPDR S&P 500 INDEX ETF (NYSEARCA:SPY) +.77% following a string of upbeat earnings reports.
Bottom line: Friday’s upbeat earnings reports buoyed investor enthusiasm despite Thursday’s disappointing report on initial unemployment claims.
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