Stock ETFs moved higher in June in volatile action and the S&P 500 logged its best month since October despite persistent worries over Europe’s debt crisis.
Equity and commodity ETFs capped the second quarter with a massive risk-on rally Friday as investors cheered support for Spain’s banks announced at a European summit. [ETFs End Q2 with a Bang]
The Dow Jones Industrial Average increased 3.7% over June. The S&P 500 rose 3.7% and the Nasdaq Composite added 3.4%
Right off the bat, weak jobs and factory order data weighed on stocks at the start of the month.
While the ongoing Eurozone crisis hanged over markets, investors remained hopeful as European leaders were beginning to seriously discuss ways to mitigate the potential implosion and provide additional aid to ailing member states, especially with Spain sounding alarms.
Despite no real commitment to another round of quantitative easing from the Federal Reserve, though the Fed did extend its “Operation Twist,” the markets began to strengthen on the Chinese rate cut and bailout prospects in Spain. Additionally, coordinated actions from global central banks to help shore up the problems in Greece also helped international markets. [Are Treasury Bond ETFs Bubblicious?]
The Eurozone dodged a bullet when a pro-bailout party come out on top. Meanwhile, the markets shifted back to Spain and Italy’s higher and potentially unsustainable interest rates. Consequently, banks tied to troubled debt were downgraded. [What’s Next for the Greece ETF After Election, Rally?]