US Stocks Retreat On Weak Data And Europe Crisis; FBT Pops, TYH Tanks

Ulli Market Review 2 Comments

[Chart courtesy of MarketWatch.com]

Stocks ended lower for the second day in a row Thursday as unease over Europe and weak US economic data eclipsed the positive Q1 earnings readings.

Treasury yields dropped for the second day in a row as US jobless claims and existing home sales data failed to meet expectations, increasing the attractiveness of US assets.

The Dow Jones Industrial Average (DJIA) surrendered 0.5 percent dropping below the psychologically important 13,000 level but still up 0.9 percent for the week.

The S&P 500 Index (SPX) dropped 0.6 percent with telecommunications gaining the most and technology faring the worst among its 10 industry sectors; the NASDAQ Composite Index (COMP) slipped 0.8 percent to close at 3007.56.

US 10-year Treasury yield remained below the 2 percent mark for the fifth day after news of weak Spanish and French debt auctions hit the market during early trade. US 10-year yield dropped 0.02 percentage points to 1.96 percent.

ETFs in the news:

Biotechnology firms remained in focus amid choppy trading today after biotech firm Human Genome Sciences (HGSI) rejected Pharma giant GlaxoSmithKline’s $2.6 billion take-over offer.

First Trust NYSE Arca Biotechnology Index Fund (FBT) topped the day’s gainer’s list, adding 5.87 percent for the day. HGS soared 97 percent after the takeover news hit the market.

The Direxion Daily Technology Bear 3x Shares (TYP) jumped 4.73 percent, though this ETF has seen significant losses this year with the markets having being in rally mode during the first quarter.

The SPDR S&P Biotech ETF (XBI) was among the day’s top gainers, adding 4 percent for the day.  XBI has been a strong performer this year.

The S&P 500 VIX Short-Term Futures ETN (VXX) managed to climb 0.7percent after the mid-day sell-off in the market. Despite today’s gain, the so-called “fear-tracking” ETN has lost 47 percent on the year, since markets have shown strong upward momentum since January.

Among the day’s top losers, the iShares S&P California AMT-Free Municipal Bond Fund (CMF) sank 3.64 percent.

The Powershare QQQ NASDAQ 100 (QQQ) lost 1.1 percent on the day as tech stocks retreated after disappointing first quarter results. Despite Apple surviving a choppy trading session today, the Qs slumped (QQQ’s largest holding is Apple Inc). The fund’s second biggest holding – Microsoft, jumped 3 percent in after hours trading which may push this ETF higher tomorrow.

There were no newsworthy changes to our Trend Tracking Indexes.

Disclosure: Holdings in QQQ

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Comments 2

  1. Do you the. Markets are starting there downturn now Instrad of may. Last year May2 started the long nasty downturn loosing 2000 points by August it’s starts to lookalike the line up … But we have election year and the fed ready to step in to fix the ugliness what do u think??

  2. Lew,

    I believe that we will see some sort of a repeat of last year with the downside coming into play big time, probably caused by the events in Europe. The open ended question is as to whether the Fed will step up to the plate again with another easing attempt should things get really bad.

    Ulli…

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