Citi Bailout, Obama Team Help Boost ETFs

Market Wrap-Up

Investors came back from the weekend with plenty of headlines to absorb Monday morning. The government announced it is injecting $20 billion into Citigroup (C) and guaranteeing $306 billion worth of troubled assets that sit on its balance sheet. The plan goes a long way toward shoring up the latest financial-services giant to run into trouble during the credit crisis. Traders seemed to think so, at least, because Citi shares jumped a whopping 60% during Monday's session.

The government was at the heart of other news. President-elect Barack Obama announced his economic team on Monday, including his nominee for the important position of Treasury Secretary: current head of the Federal Reserve Bank of New York, Timothy Geithner. Obama took questions during the press conference and acknowledged he is considering a broad stimulus package. While he didn't get specific on numbers, estimates peg the value of the plan at $500 billion, with much of it geared toward infrastructure projects and tax cuts.

The housing industry is also sending out signals it would like a piece of the bailout plan. The Wall Street Journal reported that home builders are lobbying Congress for a package that could hit $250 billion. The plea comes on the heels of data from the National Association of Realtors that shows sales of existing home and average prices fell in October.

A weak dollar and renewed investor confidence in the wake of Citi's rescue buoyed commodities on Monday, pushing the price of a barrel of crude up almost $5 to the $55 level.

The Dow Jones Industrial Average experienced a relatively consistent trading session, climbing as much as 500 points before finishing up 397 points to 8,443.

Winners

Citi's bailout package single-handedly lifted the entire financial-services industry. Rydex S&P Equal Weight Financial (RYF), an ETF that gives the same weighting to each and every finance company in that benchmark, gained 29.9%.

Market Vectors Russia (RSX) had been getting whacked the last few weeks as Russia endured falling oil prices, its own version of the credit crisis and a stock market that had to cease trading numerous times. Monday, though, a resurgence in oil and a falling dollar played in its favor. The ETF gained 25.2%.

Losers

It was a bad day to be on the wrong end of the financial services trade. The ProShares UltraShort (SKF) ETF lost 33.1%.

Tuesday's Notebook

Keep an eye on two sectors: retail and housing. Both industries have bellwethers reporting earnings Tuesday.

Earnings & Conference Calls
American Eagle Outfitters, American Woodmark, Border Group, Brown Shoe, Charming Shoppes, Chico's FAS, Coldwater Creek, D.R. Horton, Daktronics, Dollar Tree, Hormel, J. Crew, Talbots, Vimpel Communications, Zale

Economic Data
7:45a.m. ICSC Chain Store Sales
8:30a.m. 3Q Preliminary GDP
8:30a.m. 3Q Preliminary Corporate Profits
8:55a.m. Redbook Retail Sales Index
9:00a.m. Sept. S&P/Case Shiller Home Price Index
10:00a.m. Nov. Conference Board Consumer Confidence
10:00a.m. Nov. Richmond Fed Mfg. Survey
10:30a.m. Nov. Dallas Fed Mfg Production Index

Quick Take

A look at how the industry's most popular ETFs did on Monday.