Treasuries Gain ETF Investors' Attention as Markets Sink | ETF Trends

Jobless claims are up, health care remains a battleground and Greece is still facing heavy sovereign debt issues. It’s no wonder, then, that government debt is looking attractive to investors as the markets search for clues about the economic recovery’s pace.

A bipartisan health care summit opened today, where both parties will attempt to unite and finalize the health care bill. Republicans and Democrats attending the meeting at Blair House across from the White House indicated that they remain far apart on key provisions advocated by each side. PowerShares Dynamic Health Care (NYSEArca: PTH) is down more than 1% this morning. [16 State of the Union Plays.]

Bookings for civilian planes are being credited with the surprise 3% jump seen in durable goods orders last month. Economists expected a 1.5% gain, so the numbers are a pleasant surprise. They’re not enough to move the iShares Dow Jones U.S. Aerospace & Defense (NYSEArca: ITA), which is down more than 1.3% this morning.

In a more unpleasant surprise, the number of Americans filing for jobless claims rose last week. Initial jobless applications rose by 22,000 to 496,000 in the week ended Feb. 20, the highest level in three months, according to the Labor Department.

The European Commission said today that the European Union economy has a long recovery ahead after suffering its longest, deepest recession in history. The commission forecasts that the eurozone and European Union would expand by 0.7% this year, after contractions of 4% and 4.1%, respectively in 2009. iShares MSCI EMU Index (NYSEArca: EZU) is down more than 2% this morning. [Spain ETF: In a Delicate Position.]

Greece’s debt may have had the government involved to help hide the gaping losses. Many U.S. banks may have been involved in derivatives and credit default swaps with Greece, notably Goldman Sachs. The Federal Reserve is poring over the evidence and is seeking answers.

Lackluster jobless numbers and concerns about the situation in Europe have investors scurrying to take shelter in low-risk Treasuries, says Min Zeng for The Wall Street Journal. As one expert put it: risk aversion is back in a big way. [How to Protect Yourself from a Bond ETF Bubble.]

  • iShares Barclays 1-3 Year Treasury (NYSEArca: SHY)

For full disclosure, some of Tom Lydon’s clients own shares of SHY.

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