All major market ETFs pushed higher Tuesday as robust demand for Spanish debt eased global worries over a European contagion; at least for the time being, and until the next disaster strikes.
The Dow breached the psychologically important 13,000 mark for the first time in more than a week as investors analyzed the quarter’s earnings data. Treasuries dropped for the first time in three days as better risk sentiment diminished US debt’s attractiveness, pushing all three equity indices to their highest levels since March 13.
The Dow Jones Industrial Average (DJIA) leapt 1.5 percent, its biggest gain in more than a month. Tech stocks made a strong come back after losing more than 1 percent Monday while all the 30 components of Dow advanced for the day.
The S&P 500 Index (SPX) rose 1.6 percent with the technology sector advancing the most, as witnessed by the NASDAQ Composite (COMP) jumping 1.8 percent after retreating for two straight sessions.
Treasuries slumped following a three-day winning streak after latest ZEW German investors confidence report came in better-than-estimated and strong demand for Spanish debt pushed yields down below the six percent mark.
Yields on US ten-year benchmark bonds climbed 2 basis points to 2.0 percent, even as US home starts decreased unexpectedly in March and industrial production remained unchanged for the second month.
ETFs in the news:
After showing weakness for multiple weeks, the Global X Uranium ETF (URA) soared 4.94 percent today as US equities surged. Resource producer ETFs across the board performed well with products like the Market Vectors Coal ETF (KOL) and SPDR S&P Metals & Mining ETFs making progress as well.
The Market Vectors Solar Energy ETF (KWT) jumped 4.13 percent after the news of widespread layoffs planned by First Solar hit the market. KWT and Guggenheim Solar ETF (TAN) have substantial exposure in companies like First Solar, MEMC Electronic Materials, Yingli Green Energy and Trina Solar.
The iShares MSCI Italy Index Fund (EWI) rose 3.85 percent as concerns over Europe showed signs of easing. However, if you are looking to build an international portfolio, you should stay away from Europe in the near future as more debts issues are sure to surface again.
The State Street Technology Select Sector SPDR (XLK) gained 2.18 percent as the tech sector rallied Tuesday, led by Apple’s impressive rebound of 5 percent following the tech-behemoth’s three-day losing streak.
Among the day’s top losers, the Barclays iPath S&P 500 VIX Short Term Futures ETN (VXX) dropped 5.27 percent as investors’ risk appetite improved following IMF’s optimistic global economic outlook report.
Our Trend Tracking Indexes (TTIs) recovered along with the major indexes and are showing the following bullish positions:
Domestic TTI: +4.85%
International TTI: +3.66%
If you follow my Model ETF portfolios, the latest update will be posted early Wednesday morning.
Disclosure: No holdings
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