Exchange-traded funds tracking real estate slumped along with the larger market Thursday, as rising mortgage rates and more pessimism from homebuilders weighed on the sector.
Rates on 30-year mortgages rose a fourth straight week to the highest level in 10 months. Moreover, homebuilder Meritage Homes (MTH) on late Wednesday became the most recent company to cut full-year guidance amidst the continuing housing doldrums.
Ultra Real Estate ProShares (URE) was sinking $2.75, or 4.6%, to $56.85. The iShares Cohen & Steers Realty Majors (ICF) was falling $2.48, or 2.5%, to $97.67. SPDR Homebuilders (XHB) was off 78 cents, or 2.3%, to $33.37.
Utility-related funds also continued to suffer due to rising bond yields. Utility stocks, normally attractive to investors for their steady dividends, become less so as bonds gain favor -- as they are doing now, with yields of more than 5% for the first time since August.Both Exelon (EXC) and PG&E (PCG) were off more than 2%. The Ultra Utilities ProShares (UPW) was losing $3.43, or 4.1%, to $80.33. Utilities HOLDRs (UTH) was sinking $3.74, or 2.6%, to $40.10. The iShares Dow Jones US Utilities (IDU) was losing $2.35, or 2.4%, to $96.31. Bundled securities tracking health care stocks also were tanking. HealthShares Infectious Diseases (HHG) was losing 81 cents, or 3%, to $25.86. HealthShares Cancer (HHK) was losing 62 cents, or 2.2%, to $28.09. Oil-related funds were among the session's top performers. The front-month crude contract was trading up 94 cents to $66.90 on concerns U.S. refineries cannot keep up with demand for gasoline. PowerShares DB Oil (DBO) were trading up 43 cents, or 1.6%, to $27. The iPath Goldman Sachs Crude Oil Index (OIL) ETF was advancing 64 cents, or 1.7%, to $37.42. United States Oil (USO) was increasing 60 cents, or 1.2%, to $50.90. PowerShares DB Energy (DBE) edged up 19 cents, or 0.7%, to $28.72. The PowerShares DB Agriculture (DBA) was another of the few winners in Thursday's market, as grain and soybean futures advanced. The ETF was trading up 27 cents, or 1%, to $26.43.