Five ETFs to Watch This Week

NEW YORK ( TheStreet) -- A slew of earnings dominate the calendar this week. Here are the ETFs with large exposure to reports this week.

iShares Dow Jones U.S. Aerospace & Defense Index Fund ( ITA)

This fund has been a strong performer coming out of the stock market correction that finished in early February. Shares have bested the S&P 500 Index by about 3% since then.

Seven of the top 10 holdings, representing about 41% of assets, report earnings this week. Boeing ( BA) will grab the most attention and analysts have been slashing their estimates. Average earnings estimates of $1.06 per share from three months ago and 81 cents per share a week ago have tumbled to 65 cents per share.

iShares: Dow Jones US Oil Equipment & Services Index Fund ( IEZ)

Halliburton ( HAL) reports this morning and represents 10.4% of IEZ; analysts expect the firm earned 25 cents per share in the quarter past.

Nabors Industries ( NBR) reports on Tuesday. It's the No. 10 holding, with 2.8% of assets, with analysts expecting it earned 21 cents per share.

Investors will have a day to digest those two reports before Diamond Offshore ( DO), 3% of IEZ, reports Thursday; analysts predict the firm earned $1.92 per share.

Schlumberger ( SLB) reports on Friday. The firm accounts for 21.5% of IEZ and analysts expect the firm to have earned 61 cents in the previous quarter. Schlumberger's estimates declined throughout the past three months, sliding another penny in the past week.

Year to date, IEZ leads U.S. Oil ( USO) in performance, but in the past month, IEZ has lagged the returns for USO. Strong earnings reports could help the sector advance though, as investors look to this quarter's higher oil prices.

iShares: Dow Regional Banks ( IAT)

A bunch of regional banks report this week, including Zions ( ZION), KeyCorp ( KEY), PNC Financial ( PNC), Fifth Third ( FITB), U.S. Bancorp ( USB) and Marshall & Ilsley ( MI).

At 18.2% of IAT, U.S. Bancorp will have a large impact on this ETF, but the next 10 holdings also report, in addition to others. Within the top 20 holdings alone, companies representing more than two-thirds of the assets in IAT are reporting earnings.

On Friday, Goldman Sachs ( GS) walloped the financial sector, and the regional bank ETFs, which had been outperforming, were not spared.

However, the regional banks are not as involved with CDOs, and commercial real estate is the greater risk. Since the focus has turned to fraud and litigation, good earnings news this week may lead investors to separate the financials, as they have been doing in 2010, clearing the way for regional banks to lead a market rebound.

Powershares QQQ Trust 1 ( QQQQ)

Apple ( AAPL) reports on Tuesday and analysts predict the firm earned $2.43 a share in the previous quarter. That's way up from the $1.75-a-share forecast three months ago and up 2 cents in the past week.

Apple accounts for 16.8% of QQQQ, far and away the largest holding. The next three largest holdings are Google ( GOOG), Microsoft ( MSFT) and Qualcomm ( QCOM), each with more than 4.5% of assets.

On Thursday, Google reported better-than-expected earnings that grew 37%, but shares fell on Friday. The move was not the result of Goldman news either, as most of the losses came before the SEC announced fraud charges.

Materials Select Sector SPDR Fund ( XLB)

Freeport-McMoRan Copper & Gold ( FCX) makes up 9.5% of XLB and is expected to have earned $1.92 per share in the previous quarter when the firm reports on Wednesday. FCX shares were hit hard during Friday's sell-off, sliding more than iPath Copper ETN ( JJC), Southern Peru Copper ( EPU) and SPDR Gold Shares ( GLD), and also narrow mining ETFs such as Market Vectors Gold Miners ( GDX).

FCX recently failed to surpass its January 2010 high and shares have been declining since the start of April. Shares are closer to taking out recent lows rather than recent highs.

-- Written by Don Dion in Williamstown, Mass.
At the time of publication, Dion was not long any equities mentioned.

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.

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