Stock Rally Fades, Financial ETFs Swing Negative
August 22nd at 9:17am by John Spence
A nearly 200-point Dow rally faded Monday as exchange traded funds indexed to the U.S. bank sector fell to new 52-week lows.
The Dow saw nearly all its morning gains evaporate while SPDR KBW Bank ETF (NYSEArca: KBE) shed 0.5%. Key holding Bank of America (NYSE: BAC) lost over 6%.
U.S. stocks were volatile Monday following a four-week losing streak.
After a steep pullback, stocks are “bouncing along the bottom” and set to rally, Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, told Bloomberg.
The iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) reversed early losses and gained over 3% at last check. The exchange traded note tracks futures based on the CBOE Volatility Index, Wall Street’s so-called fear gauge. [Sector ETF Correlations at Two-Year High: Strategist]
In precious metals, SPDR Gold Shares (NYSEArca: GLD) added 2% as gold prices nearly touched $1,900 an ounce.
In commodities, crude futures backed off an earlier climb above $84 a barrel. U.S. Oil Fund (NYSEArca: USO) was fractionally negative.
SPDR S&P 500 ETF
Full disclosure: Tom Lydon’s clients own GLD.
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