US Equity ETFs Vacillate As Blue-Chips Retreat; INXX Soars, VXX Tanks

[Chart courtesy of MarketWatch.com]

US equities wavered Monday with the blue-chip Index closing lower while the broader markets gained modestly as investors remained uncertain about the European debt crisis following the outcome of French and Greece elections.

Yield on 10-year notes continues to trade at three-month lows as investors continue to buy world’s safest assets in an increasingly uncertain environment.

The Dow Jones Industrial Average (DJIA) retreated 0.2 percent with 17 of the 30 components of the blue-chip index ending in the negative territory. PC maker Hewlett-Packard Co (HPQ) was the biggest loser while Bank of America Corp (BAC) and Walt Disney Co (DIS) surged in a choppy trading day.

The S&P 500 Index (SPX) remained near-flat, gaining 0.48 points with technology faring the worst and financials advancing the most among the index’s 10 industry groups.

The NASDAQ Composite Index (COMP) added 1.42 points after biggest component Apple Inc (AAPL) and search-engine giant Google Inc (GOOG) ended in green territory.

US debt had rallied earlier in the day after the win of socialist leader Francois Hollande in Sunday’s presidential elections with yields touching a low of 1.82 percent, the lowest since February 3. However, yield on US 10-year bonds had clawed back by closing to end flat at 1.88 percent.

ETFs in the news:

Among the day’s top gainers, the EGShares India Infrastructure ETF (INXX) soared as emerging markets in Asia remained resilient. INXX tracks the Indxx India Infrastructure Index and jumped 4.06 percent after the Indian government deferred the newly proposed GARR tax by a year.

The Vanguard European ETF (VGK) added 1.03 percent on the day over hopes that the European Central Bank will launch a more accommodating monetary policy shortly. Hmm, I wonder how much more accommodating the ECB can get when the main issue at hand is not one of liquidity but one of solvency.

Among the day’s losers, the S&P 500 VIX Short-Term Futures ETN (VXX) slipped 1.57 percent as the so-called fear tracking Volatility Index (VIX) meandered in a large range. This behavior possibly indicates that uncertainties are here to stay with us for the time being.

Our Trend Tracking Indexes (TTIs) changed only to a small degree, and will post the exact positions again tomorrow.

Disclosure: No holdings

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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