ETFs are heading higher on Wall Street, but with no key economic data on the calendar, the focus fell to a bond auction later and to expectations for continued gains in commodity prices.
- “I suspect the market will make attempts to close at a new high in sluggish trading,” said Peter Cardillo, chief market economist at Avalon Partners, Inc. He said market participants will also be watching an auction of 7-year Treasury notes today. The government saw weak demand from investors for an auction of 5-year notes on Tuesday, which has created a backdrop of bearishness for the $29 billion auction of 7-year notes, though the U.S.’s debt auction Monday went off better. Investors looking for a bond play can consider the iShares Barclays 3 – 7 Year Treasury Bond ETF (NYSEArca: IEI), which is up slightly ahead of the auction.
- Shares of BJ’s Wholesale Club Inc. (NYSE: BJ) are up approx 6.5% this morning after the New York Post cited unnamed sources as saying buyout firm Leonard Green & Partners might launch a hostile bid for the warehouse-club retailer. The Rydex S&P MidCap 400 Pure Value (NYSEArca: RFV) is moving up in early trading; BJ’s is 2.4% of the ETF.
- Alongside BJ’s, stocks expected to attract equity-market attention are Allstate Corp. (NYSE: ALL), which reportedly has sued Bank of America Corp. (NYSE: BAC) and its Countrywide Financial unit over a $700 million investment made by the insurer in residential-mortgage-backed securities. Financial Select Sector SPDR (NYSEArca: XLF) is down 0.2% so far today on the news; BAC is 7.2%.
- Metals prices are likely to be a focus of the markets after gold futures for February delivery closed up $22.70 at $1,405.60 an ounce Tuesday in the largest one-day gain since early November. Those futures were last off $3.4 to $1,402.20 an ounce. The ProShares Ultra Silver ETF (NYSEArca: AGQ) is benefiting from the bullish commodity trend, up approx 2% in early trading.
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.
Gregory A. Clay contributed to this article.
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