Major Market ETFs Rally On Better Retail Sales Data; URA Rises, VXX Sinks

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US stocks rallied late Tuesday with the NASDAQ Composite Index topping the 3,000 level for the first time since Nov. 15, 2000, ahead of an earlier-than-due release of Federal stress-test results of the nation’s biggest banks.

JP Morgan Chase’s announcement of higher dividends, better retail sales number in February, and the Fed’s decision to continue with record low interest rates, helped today’s rally. Treasuries tanked as yields rose to 2012 highs, as the Fed raised its assessment of the economy and refrained from fresh measures to lower borrowing costs.

The Dow Jones Industrial Average (DJIA) reclaimed the 13,000 mark, adding 1.7 percent to close at 13,177.33, its biggest single-day gain since last December.

The S&P 500 Index (SPX) climbed 1.8 percent, to 1395.96, with the financial sector leading the rally among the 10-sector index ahead of stress-test results.

The NASDAQ Composite (COMP) jumped 1.9 percent, to close at 3039.88, its highest level in 11 years. The NASDAQ last closed above the 3000 level on Dec. 11, 2000.

Trading volume was thin at 907 million with more-than three stocks advancing for every stock that declined on the NYSE.

Earlier, yields on 10-year notes rose for the fifth straight day, after the Federal Reserve voted to leave its ongoing stimulus program Operation Twist unchanged. Retail sales reading came in strongest in five months, denoting higher energy prices may not dent consumer spending.

The yield of benchmark 10-year notes jumped 0.09 percentage points to end at 2.12 percent. Yields on 30-year bonds jumped 9 basis points to touch 3.26 percent, while the auction of $21 billion in govt. securities was well-supported on Tuesday.

ETFs in news:

Global X Uranium ETF (URA) made a nice come-back after Monday’s losses and added 2.6 percent on the day. Also Market Vectors Solar Energy ETF (KWT) managed to reclaim much of Monday’s losses.

Market Vectors India Small Cap Index ETF (SCIF) added 2.6 percent on the day as investor risk sentiment improved. Also materials surged with Market Vectors Steel ETF (SLX) jumping 2.6 percent.

Among the day’s losers, iPath S&P 500 VIX Short Term Futures ETN (VXX) slipped 2.6 percent, as major market ETFs continued to edge up and confidence improved. Also iShares Barclays 20 Year Treasury Bond Fund (TLT) shed 0.8 percent as longer-term assets lost investor favor.

Our Trend Tracking Index (TTI) raced climbed higher with the indexes to reach the following positions above their respective long-term trend lines:

Domestic TTI: +5.53%

International TTI: +6.24%

Disclosure: Holdings in TLT

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