ETFs Soaring As Greece Nears a Bailout Deal

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Could it really be? A plan to bail out the struggling Greek economy finally appears to be nigh, which is sending stocks and exchange traded funds (ETFs) up by nearly triple digits this morning.

As the German government approved its share of the massive Greece bailout, the Central European Bank said it would accept Greek bonds despite future downgrades. Germany has approved the $30 million loan over the next three years. Finance Minister Schauble expects the bill to be passed in Germany, and all other eurozone countries, by the end of the week.

However, analysts remain skeptical about the success of the bailout, believing that the initial impact will be positive, but may run into problems in the future when Greece tries to issue bonds on the open market, according to Stephen Deo, an economist at UBS in London, stating, "at some point, a debt restructuring remains unavoidable."

  • PowerShares Emerging Markets Sovereign Debt (NYSEArca: PCY )

United (NASDAQ: UAUA ) and Continental Airlines (NYSE: CAL ) announced a $3 billion merger that will create the largest global airline, in an all-stock deal that will give the airline the power to combat low-cost local rivals and target international markets. The merger would overtake Delta (NYSE: DAL ) as the top carrier, and serve 144 million passengers in 59 countries. However, the deal must still be approved by the Justice Department's anti-trust division, and employee unions, which have been notorious in undoing similar mergers in the past. The final value of the deal at $3.17 billion.

  • Claymore NYSE Arca Airline (NYSEArca: FAA )


Because of continued concerns over Greece, commodities markets remain an attractive safe-haven, with gold futures reaching a five month high at $1,200 an ounce. In recent activity June gold was traded at $1,185.10 an ounce, up $4.40, or .4% on the Comex division of the New York Mercantile Exchange.

  • ETF Securities Gold Trust (NYSEArca: SGOL )

Consumer spending in March increased by its highest mark in five months. The 0.6% increase in purchases matched the median prediction of economists surveyed by Bloomberg, as incomes rose for the first time this year. Household spending, which accounts for 70% of the economy, is expected to contribute to the expansion in spending in the coming months as well.

  • SPDR S&P Retail (NYSEArca: XRT )

Aaron Hurst contributed to this article.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: FAA , PCY , SGOL , XRT

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