Equities rebounded today, recovering from yesterday’s worst one-day drop in 2013, as Fed Chairman Ben Bernanke testified on the Semiannual Monetary Policy Report before the Senate Banking Committee. In his testimony, Bernanke signaled that the central bank would continue its stimulus policies, quelling fears that the Fed would wind down or scale back its bond-buying program earlier-than-expected. Also boosting equity markets, U.S. new homes sales logged in its biggest monthly jump in almost two decades while consumer confidence rebounded to hits highest level since November. In a separate report, the Federal Reserve Bank of Richmond reported that manufacturing activity in the Atlantic region turned positive this month [Be sure to check out the real estate news, trends, tips and tricks over at Dividend.com].
Rebounding from yesterday’s steep sell-off, all three major U.S. equity indexes rallied to close in positive territory today. The Dow Jones Industrial Average ETF (DIA, A-) logged in a 0.81%, as its underlying index reclaimed more than half of yesterday’s 216 point free-fall. The S&P 500 ETF (SPY, A) gained 0.68%, while the tech-heavy Nasdaq ETF (QQQ, B+) inched 0.38% higher.
In Europe, markets were mostly lower after Italy’s parliamentary election resulted in a deadlock, with no party securing enough seats to win a majority. Asian equities were also broadly lower with Japan’s Nikkei Stock Average falling 2.3% and Hong Kong’s Hang Seng Index sliding 1.3% lower.
Bond ETF Roundup
U.S. Treasuries prices slid today after Fed Chairman Bernanke emphasized his support for the central bank’s bond-buying program. Yields on 5 and 10-year notes as well as 30-year bonds rose 1 basis point [see also Seven Simple & Cheap ETF Model Portfolios].
Following Bernanke’s commentary on the Fed’s plan to continue its stimulus policy, gold futures rose 1.3%, its biggest one-day gain in three months. Oil futures, however, fell to the lowest settlement of 2013 on Italy’s inconclusive election results, which led to revived concerns about the currency bloc’s stability and the outlook for global fuel demand.
ETF Chart Of The Day #1: (XHB)
The SPDR Homebuilders ETF (XLI, A) was one of the best performers today, gaining a whopping 2.97% during the session. After U.S. new homes sales logged in its biggest monthly jump in almost two decades, this ETF soared during the first two hours of trading. XHB pushed higher throughout the day, eventually settling at $27.77 a share [see Consumer Centric ETFdb Portfolio].
ETF Chart Of The Day #2: (CUT)
The Guggenheim Timber ETF (CUT, C+) also posted a solid performance today, gaining 1.78% during the session. Also benefiting from today’s better-than-expected housing data, this ETF gapped significantly higher at the open. CUT slid sideways for the majority of the day, but turned higher in the final hours of trading, eventually settling at $21.74 a share [see Futures Free Commodity ETFdb Portfolio].
ETF Fun Fact Of The Day
The best-performing themed strategy over the trailing 3-year period has been the High Yield ETFdb Portfolio, which has gained 41.99%.
Disclosure: No positions at time of writing.