[Chart courtesy of MarketWatch.com]
US market indexes finished mostly lower today with the Dow Industrials snapping its three-day long losing streak and held up by gains of AT&T and Boeing, while the S&P 500 tanked for the fourth straight session, and the tech-heavy NASDAQ tripped by biggest-component Apple’s rare earnings miss.
The Dow Jones Industrial Average (DJIA) closed 59 points higher, with 19 stocks within the blue-chip index’s 30 components closing up.
The S&P 500 Index (SPX) was off 0.5 points to finish fractionally lower with technology lagging the most and telecommunications outgunning others among its 10 business groups.
US Treasuries fell after three days of gains as the allure of safe-haven assets faded amid speculations/hope Europe will augment its fire-fighting capacity to contain the sovereign debt crisis.
Yields on US government securities rose after media reports suggested the European permanent bailout fund may be granted a banking license. That sounds like another unsubstantiated rumor to keep equities in check.
The benchmark 10-year Treasury yield climbed one basis point to 1.40 percent while the yield on 30-year bonds remained flat at 2.45 percent in late afternoon trading.
The permanent rescue fund, the European Stability Mechanism (ESM), can access ECB lending when given a banking license, enabling it to increase its cash reserve beyond the current €500 billion that many argue as insufficient if Spain or Italy were to tap it.
Of course, it first needs to clear the biggest hurdle and that is the nod of the German High court due out later in September.
ETFs in the news:
Chipmakers and networking-gear manufacturers emerged winners, beating other sectors by wide margins today. Processor makers Altera and Broadcom sizzled on the exchanges, vaulting 12 and 7 percent respectively.
The iShares S&P North American Technology-Multimedia Networking Index Fund (IGN) leaped 3.38 percent after Riverbed Technology reported a blow-out quarter that sent the stocks 27 percent higher on a choppy day.
The world’s second largest network equipment manufacturer Juniper Networks (JNPR) surged 13 percent after the company signed a $75 million deal with Riverbed on product licensing that boosts application performance.
The Invesco PowerShares Dynamic Semiconductors Fund (PSI) also posted solid gains for the day after its sixth largest holding Broadcom Corp (BRCM) added 7.18 percent for the day. The company-specific chip manufacturer is likely to survive the macro headwinds and continue its strong performance in the next quarters, wrote Deutsche Bank analyst Ross Seymore.
Gold mining stocks also surged after the yellow metal jumped $27.40 to reclaim the $1,600 level over reports in the WSJ that the Federal Reserve may consider further monetary stimulus measures in next week’s policy meeting to pre-empt further slowdown. The Van Eck Market Vectors Junior Gold Miners (GDXJ) vaulted 4 percent as commodities rallied across the board.
There were no noteworthy changes to our Trend Tracking indexes.
Disclosure: No holdings