U.S. equity ETFs were poised to reverse a three-week slide in afternoon trading Friday as investors looked ahead to the long holiday weekend that unofficially kicks off the summer.
However, stocks were choppy this week on lingering speculation that Greece is preparing an exit from the euro. Traders appeared hesitant to hold long positions going into Memorial Day weekend.
In afternoon dealings Friday, the S&P 500 was on track for a 1.9% weekly gain, the Dow added 0.9% and the Nasdaq Composite rose 2.1%.
Facebook shares continued to languish after last week’s botched IPO – the stock was trading below the $32 offer price at last check Friday. Facebook was added to Global X Social Media Index ETF (NYSEArca: SOCL) this week, entering the sector fund with a portfolio weighting of about 9%.
In currency markets, the euro lost ground versus the dollar this week on Eurozone debt fears. PowerShares DB US Dollar Index Bullish (NYSEArca: UUP) was set for a 1.6% advance this week.
Meanwhile, Treasury yields continue to trade near record lows with yields on the 10-year note stuck under 1.8% on the deflation and safety trades.
“I would be very wary of calling the bottom for the euro at this point,” said Samarjit Shankar, a managing director for the foreign-exchange group at Bank of New York Mellon, in a Bloomberg News report Friday. “Going into the long weekend there has been an acceleration in U.S. Treasury inflows in a reaffirmation of the resolutely negative sentiment is in place for all European assets.”
Still, in U.S. equities, some of the best-performing ETFs this week tracked riskier sectors. The top unleveraged ETFs this week were iShares DJ US Home Construction (NYSEArca: ITB), SPDR S&P Homebuilders (NYSEArca: XHB) and Market Vectors Gold Miners (NYSEArca: GDX). They were on track for weekly gains of more than 6% on Friday afternoon.
Conversely, the bottom three unleveraged ETFs this week were in commodities: iPath Cocoa (NYSEArca: NIB), U.s. Natural Gas (NYSEArca: UNG) and iPath Cotton (NYSEArca: BAL) with declines of at least 6%.
U.S. equity and bond markets will be closed on Monday for Memorial Day. In the holiday-shortened week, look for economic reports on home prices, consumer confidence, pending home sales and the employment report for May.
PowerShares DB US Dollar Index Bullish
