The major stock index exchange traded funds closed slightly lower Tuesday, although rallies in AutoZone (NYSE: AZO) and DSW (NYSE: DSW) helped put retail ETFs in the black.
Silver ETFs climbed as concerns lingered about the European debt crisis and investors sought out relatively stable assets. Retail exchange traded funds were among the top-performing sector ETFs on Tuesday. [Retail ETFs Outperform]
Silver ETFs rode a strong finish to the session for a 4% gain Tuesday as the dollar weakened against major rivals. The iShares Silver Trust (NYSEArca: SLV) was up more than 4% heading into Tuesday’s closing bell. Conversely, PowerShares DB US Dollar Bullish Fund (NYSEArca: UUP) slipped 0.3%. ETF Securities in its weekly update on precious metals said speculative long positions in silver have been cleared out by higher margin requirements. [Silver ETFs Rally 4% as Dollar Slides]
An exchange traded note (ETN) that follows coffee futures was a bit lower Tuesday after JM Smucker (NYSE: SJM) raised coffee prices in its products by an average of 11%. Smucker said the move covers the majority of its coffee products sold in the U.S., including Folgers and Dunkin’ Donuts. “The increase in price is driven by sustained increases in green coffee costs,” the company said in a press release. The iPath Dow Jones-UBS Coffee ETN (NYSEArca: JO) was down 0.4% on Tuesday. The note was up 7.4% for the year-to-date period through May 20, according to Morningstar. [Coffee ETN Falls After Smucker Price Hike]
ETFs that invest in Treasury bonds are caught between two powerful crosscurrents in the markets. Although investors hear a lot about the debt ceiling and the U.S. budget deficit, Treasury yields have actually been falling recently, meaning bond prices are rising. This suggests demand for Treasuries, which are seen as a safe haven in times of market stress. For example, iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) surged in late 2008 as the worst of the credit crisis shook markets. There are powerful arguments against owning Treasury ETFs now, though, and many high-profile investors are bearish on government debt. [Treasury ETFs Caught Between Debt Worries, Safety Trade]
Financial ETFs fell on Tuesday with shares of American International Group (NYSE: AIG) down more than 1% as investors awaited a pricing of 300 million AIG shares after the bell. Financial Select Sector SPDR Fund (NYSEArca: XLF) ended the day flat. The sector ETF has dropped below its 200-day moving average, a negative sign from a technical standpoint. Paul Weisbruch at Street One Financial in a note Tuesday said large buying in put spreads was observed in the financial ETF on Monday as it closed in on its 200-day average. [Financial ETFs Weak on Citigroup, AIG]
ETFs that follow healthcare stocks and providers of medical devices were in negative territory Tuesday following weak quarterly results and a disappointing outlook from Medtronic (NYSE: MDT). “Not a great quarter,” Deutsche Bank analysts said in their quick take on Medtronic’s results. Earlier this month, the company named Omar Ishrak as its chief executive. Medtronic is about 11% of iShares Dow Jones US Medical Devices (NYSEArca: IHI), which was fractionally lower Tuesday, as was Health Care Select Sector SPDR Fund (NYSEArca: XLV). [Medtronic Results, Outlook Hurt Medical Devices ETF]
Gregory A. Clay contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.