Energy and Mining SPDR Funds Rally as Precious Metals Exhibit Decline
Rise in US and European Markets on Rising Oil Demand, Asian and Latin American Markets Decline
Major indexes rise on cues from crude uptick
US markets were trading on a higher note on March 9, 2016, after falling in the previous session. Oil prices were also trading on a positive note as reports suggested that demand for crude oil was on a rise in the United States. Meanwhile, the S&P 500 Futures Index rose by 0.56%, and the NASDAQ Futures and the Dow Jones Industrial Average went up by 0.33% at 12:00 PM EST.
The US Dollar Index, which measures the strength of the US dollar against other major currencies, was trading marginally lower by 0.15% while the CBOE Volatility Index (VIX) was seen retreating by 1.5% on Wednesday.
Gasoline inventory levels continue to contract
Gasoline inventory levels dropped for the third consecutive week by 4.5 million barrels in the week ending March 4, 2016, showcasing the biggest decline since April 2014. The fall in gasoline inventory levels was seen as a positive signal for investors in crude futures, increasing speculations of an increased demand for crude oil in the US. On the other hand, crude oil inventories rose by 3.9 million barrels in the same week ending March 4, 2016.
Impact on ETFs across sector SPDRs
The metals and mining and oil production sectors took positive cues as commodity prices continued the rally on March 9, 2016. As for sector-specific SPDRs, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) was the outperformer among major sector-specific ETFs and rose by 4.6% on March 9, 2016, at 12:00 PM EST.
The SPDR S&P Metals & Mining ETF (XME) and the Energy Select Sector SPDR ETF (XLE) were also trading higher, by 2.1% and 2.5%, respectively. Among the major sector-specific SPDRs trading on a negative note, the SPDR S&P Biotech ETF (XBI) fell by 1.3%. The SPDR Gold Shares ETF (GLD) and the SPDR S&P Regional Banking ETF (KRE) fell by 0.55% and 0.31%, respectively.
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