Stock exchange traded funds closed higher for the first time in over a week on Thursday, with the SPDR S&P 500 ETF (NYSEArca: SPY) rising almost 1% as a bounce in bank stocks such as Citigroup (NYSE: C) and Bank of America (NYSE: BAC) helped sentiment.
The S&P 500 rebounded Thursday as bulls finally stepped in and bought stocks at a key support level. Traders are now watching to see if the index can repair some of the recent technical damage. The S&P 500 is more oversold that it was at the March low, based on the 14-day Relative Strength Index (RSI), said Tarquin Coe, technical analyst at Investors Intelligence. SPDR S&P 500 ETF (NYSEArca: SPY) traded higher Thursday following its six-day pullback. It was up 2.5% year to date as of Wednesday, according to Morningstar. [S&P 500 ETF Rebound as Support]
Texas Instruments (NYSE: TXN) managed to rise almost 1% on Thursday even though the company warned its second-quarter profit and revenue might come in weaker than expected. The stock’s climb helped pull Semiconductor HOLDRS (AMEX: SMH) higher. However, some analysts see a bearish “double top” pattern playing out in the semiconductor ETF. Semiconductor HOLDRS, which is a static basket of stocks, counts Texas Instruments as its top holding at 21.5% of the portfolio. Intel (NasdaqGS: INTC) also dominates the ETF at 19.4% of assets. The sector fund is up about 4% so far this year. [Texas Instruments Warns as Semiconductor ETF See Double Top]
ETFs are one of the hot topics of discussion at the 23rd annual Morningstar Investors Conference in Chicago as investors, managers and advisers converge to talk the markets. Now, one popular mutual-fund columnist reporting from Chicago says traditional funds have already lost the battle to ETFs, which offer lower fees, daily trading and other advantages. [ETFs on Menu at Morningstar Conference]
Investors should keep an eye on weakness in high-yield ETFs because the riskier bond ETFs have been a decent leading indicator for the stock market, a technical analyst says. SPDR Barclays Capital High Yield Bond (NYSEArca: JNK) and iShares iBoxx $ High Yield Corporate Bond Fund (NYSEArca: HYG) have both fallen below their 50-day exponential moving average. [High-Yield ETF Pullback a Worrying Sign for Market?]
An exchange traded note that follows coffee futures rose over 1% on Thursday while JM Smucker (NYSE: SJM) said its quarterly profit weakened although it was able to pass some higher coffee costs along to consumers. Smucker, which owns the Folgers and Dunkin’ Donuts brands, said costs were “significantly higher” for green coffee in the fourth quarter. The iPath Dow Jones-UBS Coffee ETN (NYSEArca: JO) rose almost 2%.[Coffee ETN Buzzes as Smucker Cites Higher Prices]
Gregory A. Clay contributed to this article.
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