Tuesday's ETF Winners & Losers

Exchange-traded funds tracking European bourses were among the best performers of Tuesday's session, as shares of U.K. lender Northern Rock rebounded.

Northern Rock had pressured European indices during the prior two sessions after the lender sought emergency funding from the Bank of England, a sign that the subprime mortgage mess was spilling into overseas markets. However, shares were rallying 10%, and London's FTSE 100, the CAC 40 in Paris and Germany's Xetra Dax were all up 1% or more.

The iShares MSCI Spain Index (EWP Quote) was adding $1.39, or 2.5%, to $57.06. The iShares MSCI France Index (EWQ Quote) was up 64 cents, or 1.8%, to $36.33. The iShares MSCI United Kingdom Index (PEH Quote) rose 28 cents, or 1.2%, to $23.48. The iShares S&P Europe 350 Index (IEV Quote) was higher by $1.82, or 1.6%, to $113.12.

Bundled securities tracking the financial sector were also higher, thanks to strong earnings from Lehman Brothers(LEH Quote), as well as expectations of an interest rate cut by the Federal Reserve. Lehman beat Wall Street's forecasts by 7 cents a share, and the stock was up 3.5%.

The Federal Open Market Committee, the central bank's policymaking arm, is widely expected to cut the overnight Fed funds rate when it announces its decision at 2:15 p.m. EDT, a move that will help liquidity problems in tightening credit markets.

The Ultra Financials ProShares (UYG Quote) was rising $1.23, or 2.3%, to $55.78. The iShares Dow Jones U.S. Financial Services (IYG Quote) was adding $1.60, or 1.3%, to $121.76. The First Trust Financials AlphaDEX (FXO Quote) ETF was recently up 28 cents, or 1.6%, to $17.64.

An earnings beat by electronics retailer Best Buy (BBY Quote) was supporting a rise in retail-related ETFs. Before the opening bell, Best Buy handily beat second-quarter earnings targets and also raised its full-year profit forecast, boosting shares by 4.4%.

The SPDR S&P Retail (XRT Quote) was recently climbing 78 cents, or 2%, to $39.20. The PowerShares Dynamic Retail (PMR Quote) was up 31 cents, or 1.7%, to $18.08. The Retail HOLDRs (RTH Quote) advanced $1.42, or 1.4%, to $101.48.

On the other hand, the United States Natural Gas (UNG Quote) ETF was the worst decliner of the session, as natural gas futures fell 19 cents to $6.46 per million British thermal units. The ETF was lower by $1.05, or 2.6%, to $39.41.