Equity ETFs made a strong comeback Thursday, recouping nearly half of previous day’s losses after latest job market data showed recovery is truly gaining traction. Sentiments improved further as news of a possible Greek PSI settlement by Thursday-deadline emerged.
Also the Fed devising a new method to keep interest rates low aimed at boosting investments helped the market. Treasuries traced back part of yesterday’s gains as risk appetite went up during the day’s trading.
The Dow Jones Industrial Average (DJIA) added 0.6 percent, to touch 12,837.33. The Dow’s 23 components out of 30 advanced.
The S&P 500 Index (SPX) rose 0.7 percent to 1352.63 with the financial and the industrial sectors leading today’s gains. Utilities however, were out-of-favor in the 10-sector index and closed lower.
The tech-heavy NASDAQ Composite (COMP) added 0.9 percent to close at 2935.69 as trading remained choppy.
Following reports appearing in the WSJ that the Fed may print more money to buy long-term Treasuries or mortgages, and borrow it back at lower rates over the short-term to curb money-supply and inflation, government bonds pared some of yesterday’s gains.
Yields of U.S. 10-year Treasuries rose 0.03 percent to 1.98 percent, following ADP Employer Services report that showed U.S. private-sector hired 216,000 employees in February. The 30-year Treasury bond yield gained 0.05 percent to 3.12 percent.
In ETF news, following yesterday’s steep fall of U.S. indexes that saw the iShares Dow Jones U.S. Home Construction Index Fund (ITB) and SPDR S&P Homebuilder ETF (XHB) descending to their 50-day moving averages, ITB made a smart mid-week come-back and added 3.7 percent on the day.
Physical Palladium Shares (PALL) also added 3.43 percent on the day as palladium bullion prices recovered following Tuesday’s market sell-off.
Global X China Consumer ETF (CHIQ) is among the day’s top gainers and added 2.63 percent for the day. However, China’s lower growth projection for 2012 however remains a worry.
Among the day’s losers, iPath S&P 500 VIX Short Term Futures ETN (VXX) shed 4.99 percent as fear over Greek default subsided ahead of Thursday’s deadline.
The iPath Dow Jones UBS Grains Subindex Total Return ETN (JJG) lost 1.59 percent ahead of Friday’s U.S. Department of Agriculture’s crop report.
Gas prices receded for the second consecutive day today, easing inflation worries and its effect on the economy. However, prices are already higher 14.7 percent this year.
Oil for April delivery added $1.46 to close at $106.16 a barrel while Gold futures for April delivery moved up by $11.80 to $1,683.90 an ounce.
Our Trend Tracking Indexes (TTIs) recovered as well with the Domestic TTI now being positioned at +4.62%, while the International TTI is plagued by more weakness, but is still hanging on at +2.98%.
Disclosure: No holdings
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