Small-cap exchange traded funds led the way higher in Monday’s dealings as U.S. stock ETFs started the week on strong footing after seven weeks of lackluster action.
However, Wall Street darling Apple (NasdaqGS: AAPL) weighed on the technology sector and traders want to see if the stock can climb back above its 200-day moving average. Apple shares are in unfamiliar territory — they haven’t fallen below this key technical level in over two years. [Apple Hits Nasdaq-100 ETF]
Risker small-cap ETFs were in the forefront of Monday’s rally as iShares Russell 2000 (NYSEArca: IWM) jumped more than 1%.
In sector ETFs, energy was a laggard after Nabor Industries (NYSE: NBR) warned on its second-quarter profit. [Nabor Saps Energy ETFs]
Fear indicators pulled back in Monday’s market despite lingering concerns over the debt crisis in Greece. Investors are also looking ahead to the Federal Reserve meeting this week and Fed chief Ben Bernanke will hold another press conference. [Europe ETFs in Spotlight]
VelocityShares Daily 2X VIX Short-Term ETN (NYSEArca: TVIX) was down 7% in recent action.
“The week ahead should be dominated by the continuing crisis in Greece and an update on the Federal Reserve’s view of monetary policy, as ‘QE2’ winds down,” said David Kelly, chief market strategist at JP Morgan Funds, referring to the Fed’s second round of quantitative easing designed to boost the economy.
“The good news for markets is that each time over the last year when European leaders have stared into the face of a default by a Eurozone member, they have correctly concluded that default would be far more costly and disruptive than further loans,” Kelly said.
“The bad news is that they have failed to grasp that what Greece really needs is a grant rather than a loan and that Europe will not be able to get beyond this crisis until it has done what is needed to put Greece and other budget-strapped nations on a path to economic growth,” he added.
iShares Russell 2000
