Last Hour Lift-A-Thon Saves The Day; Europe Turns Lower

[Chart courtesy of MarketWatch.com]

US market indexes staged a late-session comeback Monday that erased early losses to end marginally higher after the technology sector rallied to lift major equity averages.

It was the usual afternoon lift-a-thon we have become accustomed to witness now that the Fed is officially in charge of stock market direction.

Following last week’s steep losses after disappointing earnings results by Google and Microsoft, the tech sector bounced back Monday to finish about 1/3 percent higher.

Despite losing 108 points in early trade, the Dow Jones Industrial Average (DJIA) managed to add 2 points while the S&P 500 Index (SPX) added less than a point with information technology outperforming the index and energy, telecom and consumer discretionary faring the worst among its 10 business groups.

After falling below the 3,000 level in intraday trade for the first time since August 13, the NASDAQ Composite Index (COMP) erased losses to finish 11 points higher at 3017.

US Treasuries turned lower Monday giving up prior-session gains as investors chose to wait while the Fed’s policy-setting Open Market Committee meets Tuesday and Wednesday.

Meanwhile, the euro rose Monday after Spanish Prime minister Mariano Rajoy’s Popular Party thumped the opponent in his home region Galicia, raising hopes voters may back his reforms and tough austerity measures.

European stocks edged lower after struggling to stay positive Monday. Taking cue from across the Atlantic, the pan-European Stoxx Europe 600 index finished 0.4 percent after Wall Street equity averages turned choppy in early trade.

Greece, however, bucked the trend with the Athens General Index surging 2.7 percent over optimism the country will receive its next tranche of aid package. There have been speculations of a potential deal that will allow Greece to access the European Stability Mechanism fund to buy back its own bonds for 25 percent of their value, thus cutting down debt drastically. The German Finance Ministry is currently studying the idea, according to reports in German magazine Der Spiegel.

Despite Rajoy’s ruling party winning the weekend elections, the Spanish IBEX 35 index drifted lower, losing 0.5 percent for the day. Shares of Banco Santander SA tumbled one percemt.

The German DAX 30 index dropped 0.7 percent with tire manufacturer Continental AG tumbling 1.2 percent.

The CAC 40 index tracked 0.4 percent lower in Paris while the FTSE 100 index shed 0.2 percent in London, weighed down by index heavyweight BP Plc.

In the ETF space, the SPDR S&P China ETF (GXC) was among the top performers, gaining 1.52 percent on the day. China-linked funds surged after the country announced its commitment to draw up plans for further economic reforms. The MSCI Japan Index Fund (EWJ) also climbed 1.42 percent over hopes the country’s central bank will soon launch more stimulus package after exports dropped 10 percent in September.

Several readers have requested that I post the day ending Trend Tracking Index positions (TTIs) on a daily basis. No problem; here are today’s numbers:

Domestic TTI: +1.64%

International TTI: +4.12%

Disclosure: No holdings in ETFs discussed above

About Ulli Niemann

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