Citigroup’s (NYSE: C) 10-for-1 reverse share split has dramatically reduced overall trading volume in the U.S. stock market, but it turned out to be a nonevent for exchange traded funds tracking the financial sector and banks. Citi’s reverse split and plans to pay a dividend are partly designed to attract more institutional investors to the shares. Yet financial-sector ETFs with large stakes in Citi are still left with the same allocation to the stock after the move. [Financial ETFs Take Citigroup Reverse Split in Stride]
ETFs that invest in Treasury bonds have been moving higher despite fears over the U.S. budget deficit and high-profile investors betting against government debt. Bond ETF investors are at a fork in the road, as uncertainty has plagued the fixed-income market. The Federal Reserve ends its bond-buying program less than two months from now, and investors are analyzing the slow-growth climate in markets and how bonds may fit into their portfolios. PIMCO’s Bill Gross has also stepped up his bet against U.S. debt, Reuters reported this week. [Treasury ETFs Rise Despite Investor Doubts]
Telecom ETFs were among Tuesday’s best-performing sectors as a 5% rally in Level 3 Communications (NasdaqGS: LVLT) carried the group higher. Level 3 shares were close to setting a new 52-week high as investors continued to bid the stock higher in the wake of the company’s recent quarterly results. In April, the company said it would acquire Global Crossing in a $3 billion deal (NasdaqGS: GLBC). Level 3 reported a smaller loss in its latest quarter. [Level 3 Rally Powers Telecom ETFs]
Stocks were higher Tuesday but healthcare exchange traded funds (ETFs) trailed the market as Boston Scientific (NYSE: BSX) slipped 9% after the maker of medical devices announced its chief executive will step down at the end of the year. Boston Scientific said Ray Elliot will retire in December and that it is looking for a replacement. [Healthcare ETFs Lag Market as Boston Scientific Weighs]
Gregory A. Clay contributed to this article.