U.S. equity ETFs paused for breath this week as the S&P 500 was in danger of snapping its six-week winning streak.
However, stocks were higher Friday on lingering talk the European Central Bank may announce measures to shore up troubled government bond markets.
“Anytime we get comments out of Europe that create a perception that they are working diligently to solve the debt issue, the euro starts to rally, the dollar goes lower and in return, our equity markets move higher,” said Randy Frederick, managing director of active trading at Charles Schwab, in a Reuters report.
“I’m not sure if this will have lasting impact on the market but one thing for sure is that the market was sort of in this consolidation mode before this news came out,” Frederick added.
In afternoon trading Friday, SPDR S&P 500 ETF (NYSEArca: SPY) was down 0.7% for the week, the Dow slipped 1.2% and the Nasdaq Composite fell 0.4%.
“The S&P 500 was weak again yesterday with some further selling this morning and a brief drop beneath the 1400 level. However, prior to this week, the index had risen for six consecutive weeks. Following a run like that a down week was inevitable and healthy, as it is allowing the rally to breathe,” wrote Investors Intelligence analyst Tarquin Coe in a newsletter Friday.
“We remain bullish and are holding onto longs in anticipation of an upside reassertion. Only a sustained break of the 50-day exponential moving average, currently rising through 1377, would cause us to review that standing,” he said.
SPDR S&P 500
