Sector Wrap: Basic Materials, Gold, Airlines
Thursday, October 8, 4:24 PM ET

News out of Australia early Monday morning was reporting the Australian Central Bank had raised interest rates, further enforcing the belief of many investors that the global economy was indeed recovering. On the news, the US Dollar fell against most other currencies leading to the strong move in gold this week. Gold crossed the $1060 per ounce mark earlier this afternoon and it is currently trading at $1055 per ounce.

Investors have been flocking to the Market Vectors Gold Miners ETF (AMEX:GDX) this week, sending shares higher by one and a half percent today and almost fifteen percent this week.

After the bell on Wednesday, Alcoa (NYSE:AA) announced third quarter earnings of $77 million dollars or eight cents per share. Wall Street estimates called for a loss of ten cents in the quarter, which the aluminum manufacturer easily beat. The Dow component said key markets are stabilizing and shipments are rising as inventories are at historic lows still. Further helping the basic materials sector was Mosaic (NYSE:MOS) who reported earnings of twenty three cents per share on Monday night. While earnings fell short of Wall Street estimates, investors were encouraged by management's outlook for 2010.

In afternoon trading, the iShares Basic Materials ETF (AMEX:IYM) was showing gains of almost two and a half percent on the day and more than eight percent on the week.

And the airline sector saw mixed news this week. JetBlue (NASDAQ:JBLU), Republic Airways (NASDAQ:RJET) and Hawaiian Airlines (NASDAQ:HA) all saw an uptick in passenger traffic in September. All three increases lend to the theory that business and leisure travel are on the upswing with the recovering economy. However, bad news for investors came from Airtran Holdings (AAI) as the company announced an offering of nine million common shares and $75 million of convertible senior notes. The expected dilution had investors hitting the sell button as shares tumbled more than seventeen percent on Wednesday.

On the week though, the good news outweighed the bad as the Claymore Airline ETF (FAA) is showing gains of almost three percent on the day and four and half percent for the week.