Six ETFs to Watch This Week

The stocks of energy producers and health care companies will be in the spotlight this week.
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NEW YORK (TheStreet) -- Earnings from health care and energy producers will take the spotlight this week, with auto sales and April unemployment figures likely to grab attention during the week.

iShares Dow Jones U.S. Pharmaceuticals (IHE) - Get ReportMerck (MRK) - Get Report and Pfizer (PFE) - Get Report combine for about 16% of this ETF and both report on Tuesday.

This sector has been struggling lately and much of healthcare has been lagging the market, including the relatively strong biotechnology sector that had done well for much of the year. Under performance started when healthcare reform was finally passed and signed into law by President Obama.

Analysts estimate Pfizer earned 53 cents a share in the previous quarter and those estimates have been trending lower, along with the estimates for full year earnings. Merck is expected to have earned 75 cents per share and its estimates also have trended lower. If these companies fail to lift the sector, there's not much to attract investors in the short-term.

iShares:MSCI Israel Cap

(EIS) - Get Report

Teva Pharmaceuticals

(TEVA) - Get Report

, the largest holding in EIS, reports Tuesday.

Generic drugs have been tough competitors in the pharmaceutical industry, and Teva recently had a generic version of Flomax approved. Analysts predict the firm earned 89 cents in the previous quarter, and while that estimate has been coming down, unlike Merck and Pfizer, estimates for the coming quarter and year have been flat or rising.

At 24% of assets in EIS, Teva is the heavyweight in this ETF. Since the passage of healthcare reform, Teva is down about 9%, a slide that has pulled EIS down about 6%.

First Trust ISE - Revere Natural Gas

(FCG) - Get Report

Chesapeake Energy

(CHK) - Get Report


EOG Resources

(EOG) - Get Report

report Tuesday,

Devon Energy

(DVN) - Get Report


XTO Energy


report on Wednesday.


(APC) - Get Report

reports this morning.

Shares of Anadarko were hit last week due to the firm's minority stake in the rig that sank in the Gulf of Mexico and on comments from Obama adviser David Axelrod, who said the government will halt new Gulf projects until the cause of the explosion is determined.

Natural gas prices were pummeled on Thursday of last week and

U.S. Natural Gas

(UNG) - Get Report

hit a new 52-week low on Friday, a possibility I warned about in a recent


in which I said weakness in the short-term presents buying opportunities because the long-term fundamentals of natural gas are improving.

PowerShares Dynamic Media

(PBS) - Get Report

Time Warner


reports on Wednesday and analysts predict the firm earned 49 cents per share in the previous quarter; the

Washington Post


reports Friday and analysts expect $3.82 per share for the quarter.

Rising advertising revenue has been helping some media companies, but a drag on performance in the past three weeks came from


(GOOG) - Get Report




, which owns Standard & Poor's.

Although PBS remains one of the strongest sector ETFs in 2010 in terms of momentum and is up about 20% this year, shares are about 1% below their highs for the year in part due to the recent slump in those two stocks. If PBS can't rally through its high, a change in sector leadership could be in the cards in the coming weeks.


(GLD) - Get Report

Gold is the currency of choice these days for a growing number of investors and the metal has advanced along with the U.S. dollar this year. Gold appears to be in a win-win position at the moment. If the U.S. dollar strengthens due to European debt crises, gold will rise. If the U.S. dollar weakens versus the euro, gold will rise.

Europeans are trying to decide how to deal with Greece and the uncertainty has been slamming the euro. On May 9, regional elections in Germany may weaken Chancellor Angela Merkel's ruling coalition and perhaps threaten any aid deal. This week is likely to see more rhetoric than action due to those elections.


(FXI) - Get Report

China's mainland stock market, as measured by the Shanghai Composite index, peaked in August 2009. Although the index is above its September 2009 lows, it did hit a new low for 2010 on Friday. FXI, which peaked in November 2009, is about 11% above its 2010 low.

The Chinese government has announced strict new rules on housing. In addition to raising down payments and interest rates earlier in the month, local governments in hot markets have added new measures to slow the market. Last week, Beijing restricted families to only one home purchase and cancelled a land auction because the property developers exceeded the price ceiling for the auction.

Chinese banks reported very strong earnings due to increased lending in the past year, but those loans mean the banks now need to raise billions in capital to meet regulatory requirements. The heavy financial sector exposure in FXI has been a drag on the fund for months, but with the brakes being slammed on housing, the mainland stock market at 2010 lows, and secondary offerings from the banks coming up, lower prices from FXI are likely.

-- Written by Don Dion in Williamstown, Mass.

At the time of publication, Dion was long iShares:Dow US Pharma, iShares:MSCI Israel Cap and iShares Trust Comex Gold ETF .

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.