There is no dearth of
tracking large-cap energy stocks, but one stood above the crowd
on Tuesday. Tuesday's effort may not be one-and-done event for
this ETF, either. With a deluge of marquee earnings reports from
the energy sector still to come, the somewhat unheralded iShares
Dow Jones U.S. Oil & Gas Exploration & Production Index
) has room to run higher.
On volume that was better than double the daily average, the
iShares Dow Jones U.S. Oil & Gas Exploration & Production
Index Fund jumped almost 2.7 percent today. One catalyst was a
strong earnings report from refinery operator Valero (NYSE:
Valero said its fourth-quarter profit surged to $1.01 billion,
or $1.82 per share, from $45 million, or 8 cents per share, a
year earlier. Revenue rose to $34.70 billion from $34.67 billion.
Analysts expected a profit of $1.22 a share on revenue of $31.37
billion. That news sent Valero soaring by almost 13 percent,
touching off a rally across the refiner space.
That was good news for IEO because Valero is the ETF's
seventh-largest holding at a weight of almost 4.5 percent. IEO
could continue receiving a boost from refiners because Phillips
), the ETF's third-largest holding with an allocation of 7.4
percent, steps into the earnings confessional Wednesday. So does
Marathon Petroleum (NYSE:
), IEO's sixth-largest holding.
Other refiners including Tesoro (NYSE:
), HollyFrontier (NYSE:
) and Pioneer Natural Resoruces (NYSE:
) report next month. Those three stocks combine for over five
percent of IEO's weight.
A potentially significant day for IEO on Wednesday could be
followed by more of the same on Thursday when Occidental
), the fourth-largest U.S. oil company, reports fourth-quarter
California-based Occidental is in the midst of a cost-cutting
that could show some positive impact on the Q4
. Important to note is the fact that oil prices started creeping
higher in the fourth quarter and Occidental as one of the
"oilier" oil companies, is often more sensitive to price
fluctuations for the commodity than its rivals.
Chartists will find interesting the fact that IEO closed at
$69.75 on Tuesday, just below stiff resistance at $70. If
Phillips 66 and Marathon Petroleum can follow in Valero's
footsteps Wednesday and deliver blowout results, IEO should have
no problem traversing $70 and starting a new leg higher.
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment
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