US broad markets ended higher with the NASDAQ dropping after blue-chips reversed their longest losing streak in nine months following a dip in jobless claims.
Investors, however, remained cautious as Europe wavered over Greece’s possible exit from the monetary union. Treasuries cut losses as investor-demand for safe-haven US debts remained strong, though yields rose for the first time this week today.
The Dow Jones Industrial Average (DJIA) struggled to gain 19.98 points, breaking the six-day losing streak. All but 11 of the blue-chip’s 30 components ended higher with computer networking gear-maker Cisco Systems Inc (CSCO) hitting the ground hardest, losing 10 percent for the day.
The S&P 500 Index (SPX) added 3.41 points with technology closing lower while utilities gained the most. The NASDAQ Composite Index (COMP) slid to close 1.07 points lower, its third consecutive day of losses as technology stocks remained laggards.
After rising as much as 8 basis points during the day’s trade, yield on current 30-year bonds settled 3 basis points higher at 3.05 percent. The yield had dropped to 2.98 percent Wednesday for the first time since Feb 2. The benchmark yield on 10-year bonds surged six basis points to 1.88 percent, its biggest single-day gain since April 3.
ETFs in the news:
The iShares MSCI Spain Index Fund (EWP) engaged in a dead cat bounce and remained one of the top gainers after the Spanish central bank agreed to take over the country’s fourth largest lender Bankia, bringing relief to the shareholders of the struggling giant.
Bankia’a nationalization triggered a bounce in Spanish equities, driving the MSCI Spain Index higher. I doubt that this is more than just a short lived relief rally.
Following the release of the weekly EIA natural gas report that showed inventories have gone down more than estimated, the United States Natural Gas Fund LP (UNG) jumped 0.74 percent. Despite today’s modest gains, UNG remains 30 percent lower on the year.
Another NG linked product, the DJ-UBS Natural Gas Subindex Total Return ETN (GAZ) shed 1.43 percent, which can be attributed to its high premium.
Among the day’s losers, the Market Vectors-Solar Energy ETF (KWT) topped the charts, losing 3.85 percent for the day. Solar power related products were out of favor with investors today as the Guggenheim Solar ETF (TAN) also shed 1.99 percent.
As broad markets recovered after days of battering, the volatility-index tracking S&P 500 VIX Short-Term Futures ETN (VXX) tanked 3.04 percent. Better stay away from this ETF, if you are a conservative investor as VXX has lost more than 50 percent since the beginning of the year.
Of course, volatility could pick up in a hurry tomorrow, as the futures are pointing to a sharply lower opening (as I am writing this) based on JP Morgan’s (JPM) sudden revelation of ‘surprise’ trading losses. Hmm, let’s see how this story develops; there is never just one cockroach around…
Our Trend Tracking Indexes (TTIs) recovered slightly with the Domestic TTI sitting on the bullish side of the trend line by +3.44%. The International TTI, which had dropped barely into bear market territory yesterday, eased back above the line by a scant +0.23%.
As I mentioned yesterday, I will not announce the end of this current international Buy cycle until the TTI clearly drops below its trend line.
The updated StatSheet will be posted tonight by around 6:30 PM PST.
Disclosure: No holdingsContact Ulli