U.S. Steel Upgrade, Nucor Guidance Lift Materials ETFs

Steel and materials sector-related exchange traded funds jumped Wednesday after Bank of America/Merrill Lynch upgraded United States Steel ( X ) and Nucor ( NUE ) to better-than-expected guidance.

Among the best performing ETFs of Wednesday, the VanEckVectors Steel ETF (NYSEArca: SLX ) rose 3.9% and was testing its short-term, 50-day simple moving average. SLX includes a 7.0% tilt toward NUE and 4.6% X.

Meanwhile, the SPDR Metals & Mining ETF (NYSEArca: XME ) , which includes a 50.5% weight in steel industry, increased 4.0% on Wednesday. The broader Materials Select Sector SPDR (NYSEArca: XLB ) , which has a 11.9% positions in metals and mining, was 0.9% higher.

Related: 23 Best ETFs to Track Basic Materials

The steel industry rallied after Nucor announced strong guidance for the 2016 second quarter.

"The performance of the steel mills segment in the second quarter of 2016 is expected to be much improved compared to the first quarter of 2016 due to higher average selling prices and improved volumes," Nucor said in a statement.

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Nucor is enjoying increased net income, solid financial position with reasonable debt levels, solid stock price performance and growth in earnings per share, reports Rachel Graf for TheStreet.

NUE shares were 1.6% higher Wednesday.

Additionally, Bank of America/Merrill Lynch raised the outlook on United States Steel to "neutral" from "underperform," citing stable earnings due to expectations of more limited supply in the next several quarters, reports Michael Sheets for TheStreet.

X shares were up 8.4% Wednesday.

Related: More Good News for the Steel ETF - AKS, X

The steel industry is also strengthening from measures taken by the Commerce Department to reduce the supply of cheap Chinese steel imports, which have contributed to the lingering low prices. The commerce Department imposed a 266% tariff on Chinese cold-rlled steel imports and prices have rallied roughly 21% over teh past two months reports James Passeri for TheStreet.

For more information on the materials sector, visit ourMaterialscategory.

VanEckVectors Steel ETF

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

This article was provided by our partner Tom Lydon of

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

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