Daily ETF Roundup: Buy The Rumor, Sell The Tweet

by on April 23, 2013 | ETFs Mentioned:

It was a tumultuous day on Wall Street today, after a false tweet nearly derailed the markets. During the afternoon hours, the Twitter account of the Associated Press was hacked, and a tweet claiming that there were two explosions in the White House and that Obama was injured sent markets veering; the Dow plunged 145 points in less than two minutes, U.S. Treasury bond prices soared, and oil briefly dipped. Despite the knee-jerk reaction traders had to the Twitter debacle, markets manged to recover to end higher. Lesson of the day: buy the rumor, sell the tweet [see Free Member Report: How To Pick The Right ETF Every Time].

Global Market Overview: Buy The Rumor, Sell The Tweet4-23

Despite today’s rather bizarre Twitter episode, all three major U.S. equity indexes managed to close in positive territory. The Dow Jones Industrial Average ETF (DIA, A) ended 1.02% higher, as its underlying index rallied 152.29 points. The S&P 500 ETF (SPY, A) rose 1.03%, while the tech-heavy Nasdaq ETF (QQQ, B+) jumped 0.96%.

In Europe, markets were higher as investors are optimistic that the eurozone is moving towards policies that stimulate growth; the Stoxx Europe 600 rallied 2.4%. Meanwhile, Asian markets were lower; Japan’s Nikkei Stock Average slipped 0.3%, while China’s Shanghai Composite Index tumbled 2.6% after the HSBC’s preliminary purchasing manager’s index declined more than expected.

Bond ETF Roundup

U.S. Treasury prices were slightly lower in today’s choppy trading session. Yields on 5-year notes traded roughly flat at 0.694%, while yields on 30-year bonds and 10-year notes rose less than one basis point [see also Seven Simple & Cheap ETF Model Portfolios].

Commodity Roundup

Crude oil futures remained essentially unchanged as investors look ahead to the latest U.S. petroleum-supply figures. Natural gas and gasoline futures, however, traded slightly lower. Meanwhile, gold futures logged in their first loss in four sessions following today’s disappointing manufacturing data from China.

ETF Chart Of The Day #1: (IAK)

The Dow Jones U.S. Insurance Index Fund (IAK, A-) was one of the best performers today, gaining 2.52% during the session. After Travelers (TRV) reported earnings that came in well above expectations and announced an increased dividend, this ETF gapped significantly higher at the open. IAK pushed higher throughout the day, eventually settling at $38.28 a share [see Financials Free ETFdb Portfolio].

Click To Enlarge

Click To Enlarge

 

ETF Chart Of The Day #1: (XHB)

The SPDR Homebuilders ETF (XHB, A+) also posted a strong performance today, gaining 2.56% during the session. After D.R. Horton, Inc. (DHI) announced that sales of new single-family homes rose 1.5% in March, this ETF gapped significantly higher at the open. XHB slid sideways for the remainder of the day, eventually settling at $29.65 a share [see Consumer Centric ETFdb Portfolio].

Click To Enlarge

Click To Enlarge

 

ETF Fun Fact Of The Day

The best-performing regional strategy over the trailing one-year period has been the Global Titans ETFdb Portfolio, which has gained 12.73%.

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]

Disclosure: No positions at time of writing.