After ending a relatively choppy week on a high note, markets seemingly took a breather today as bullish momentum slowed its course. ECB President Mario Draghi’s comments last week had investors skeptical of how committed the central bank was to helping ease the plagued region’s deepening financial crisis. The ECB had emphasized their willingness to take “unconventional measures”, but only under strict conditions and after struggling countries submit a request for aid. Over the weekend however, Spanish Prime Minister Rajoy hinted at the possibility of the debt-laden nation making a formal request for support from the Euro Zone bailout fund. Although Spain has not officially committed itself to the ECB’s new stimulus measures, stocks took their cue and managed to stay in positive territory [see also ETF Insider: No News Could Be Good News].
U.S. equities rallied on the back of a strong close in Europe, with materials stocks leading markets higher. Tech-heavy Nasdaq had the biggest gains today, sending QQQ up 0.76%. The S&P 500 flirted with 1,400 for the first time in three months, while the Dow Jones Industrial Average inched higher, building on Friday’s impressive gains.
Bond ETF Roundup
Last week, an upbeat jobs report sent Treasury yields skyward to its 4-week high. But the attractively low prices had bargain shoppers returning to the safe-haven asset today, allowing Treasuries to recoup some of its losses after Friday’s sell off. Yields on Spanish and Italian bonds also fell today after Euro Zone tension finally subsided.
Commodity ETF Roundup
A slight pullback in the U.S. dollar had investors rushing to precious metals today. Gold and silver futures posted modest gains, while platinum contracts took a slight dip. Commodity traders’ favorite industrial metal, copper, also made its way into positive territory. After months of record-high temperatures and severe drought conditions, the Midwest finally got a reprieve with some much needed rainfall, putting downward pressure on soybean and corn prices.
ETF Chart Of The Day #1: XLB
The State Street Materials Select Sector SPRD ETF (XLB) had an impressive run today, gaining 0.91% on the session. Materials and technology sectors led markets higher, forcing this ETF to gap higher at the open. XLB continued its uptick throughout the day, settling just below its high of $35.63 a share [see also Commodity Guru ETFdb Portfolio].
ETF Chart Of The Day #2: TAN
After several months of dismal trading, the Guggenheim Solar ETF (TAN) finally shined today, gaining a remarkable 4.79% on the session. Last Friday, First Solar beat second-quarter profit expectations, prompting many investors to turn bullish on the alternative energy class. At today’s open, TAN gapped higher, while trading volume spiked during afternoon trading hours.
Emerging markets ETFs have been all over the board this year. The worst performer in the Emerging Markets ETFdb Category, the Market Vectors Russia Small Cap ETF (RSXJ), is down about 6% so far in 2012. The best performer in that same category, the iShares MSCI Turkey Investable Market Index Fund (TUR), has added a whopping 36%.
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Disclosure: No positions at time of writing.