US stocks finished higher Tuesday as investors turned slightly bullish on signs of improvement in the housing market, although clouds continue to hang over the markets ahead of the EU summit meeting scheduled for Thursday and Friday this week.
Treasuries retreated as risk sentiments improved over speculation that European leaders were progressing over resolving the ongoing sovereign crisis. US Treasury notes pushed ahead, recovering from the day’s lowest level after German Chancellor disapproved proposals for Eurobonds which requires shared responsibility of the region’s liabilities.
The Dow Jones Industrial Average (DJIA) climbed 0.3 percent, after rising more than 74 points and sinking more than 50 points as the indexes turned choppy during the day’s trade. 18 among the Dow’s 30 components closed the day higher.
The S&P 500 Index (SPX) rose 0.5 percent with consumer discretionary and energy fronting the day’s winners among its 10 business groups.
Treasury yields gained in early trade after a S&P/Case-Shiller report showed US home prices rose 1.3 percent in April after seven months, though the relief proved fleeting after the Conference Board consumer confidence reading dropped for the fourth straight month, printing 62 for June against 64.4 in May.
The benchmark 10-year Treasury yield increased three basis points to 1.63 percent in late afternoon trading, New York time. Yield on 30-year bond advanced two basis points to finish at 2.70 percent.
ETFs in the news:
The Invesco PowerShares DB Agriculture Fund (DBA) emerged as one of the top gainers, adding 1.44 percent for the day. Against the normal average trading of 777,000 shares daily, this agricultural commodity saw a spike in volume today with 3.4 million shares changing hands. Agriculture commodities have witnessed heightened volatility recently, largely due to the sudden bout of hot weather.
As US indexes made moderate gains today, the so-called fear-tracking CBOE Volatility Index (VIX) tumbled 3.24 percent. The ProShares VIX Short Term Futures ETF (VIXY) lost 2.95 percent on the day. As markets have turned choppy over developments in Europe, this ETF has witnessed greater activity recently. Nonetheless, it is trading close to its 52-week low.
Our Trend Tracking Indexes (TTIs) meandered with the markets and closed at +1.25% (Domestic TTI) and -4.34% (International TTI).
Be sure to tune into the latest ETF Model Portfolio report, which I will post tomorrow morning.
Disclosure: No holdings
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