Equity ETFs Remain Range-Bound As Investors Remains Skeptical; CORN Grows, KWT Flickers

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[Chart courtesy of MarketWatch.com]

Equity ETFs remained range-bound with blue-chips advancing for the fourth day Monday, ahead of the Federal Reserve’s monetary policy meeting and a raft of economic data releases this week, which are expected to support the case for a rate hike and undermine the requirement for another round of assets purchase by the Fed.

The Dow Jones Industrial Average (DJIA) added 0.3 percent on the day to end at 12,959.71, its fourth day of gains since Jan. 20, while the S&P 500 Index (SPX) rose 0.22 points to 1352.63, also its fourth straight day of gains with defensive areas like utilities, consumer staples and telecom advancing the most.

Treasuries lost further ground as speculation of QE3 eased and an auction of three-year notes evoked weaker-than-expected response. The Treasury is due to sell $21 billion 10-year notes tomorrow when the FOMC meets. Markets remain edgy ahead of the Fed’s stress-test results of the nation’s banks on Thursday.

Yield on three-year notes rose to 0.456 percent against analysts’ expectation of 0.450 percent. As demand remained sluggish, yield on 10-year notes rose slightly to 2.04 percent from 2.03 percent a day earlier. However, yield on 30-year bonds fell one basis point to 3.17 percent on robust demand.

ETFs in the news:

Corn futures pushed higher today with Teucrium Corn ETF (CORN) topping the winner’s chart by adding 1.99 percent. The iPath Dow Jones UBS Grains Subindex Total Return ETN (JJG) also ended higher.

The State Street Utilities Select Sector SPDR (XLU) added 1.14 percent on the day as defensive stocks remained bullish in the day’s trading on Monday.

The iPath S&P 500 VIX Short Term Futures ETN (VXX) was the day’s biggest loser, tumbling 4.58 percent for the day. The S&P Volatility index sank below 16 to a multi-month low on Monday.

Among choppy trading today, volatile industries like solar took the hit with Market Vectors Solar Energy ETF (KWT) losing 3.7 percent for the day.

Oil futures for April delivery eased $1.06 to $106.34 a barrel and Gold futures for April delivery shed $11.70 to $1,699.80 an ounce.  Our Trend Tracking Indexes (TTIs) stayed within shouting distance of Friday’s close.

Disclosure: No holdings

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