HP Weighs on Dow; JP Morgan Lifts Financial ETFs | ETF Trends

Hewlett-Packard’s (NYSE: HPQ) reduced full-year profit hurt the Dow on Tuesday as the stock lost more than 7%, but strength in JP Morgan (NYSE: JPM) and the bank exchange traded funds helped offset some of the damage.

Technology ETFs felt a headwind Tuesday from Hewlett-Packard. [HP Hit on Outlook, Leaked Memo]

However, an ETF following large tech stocks listed on the Nasdaq closed slightly positive Tuesday while the major indicators slipped and traders keyed on Dell (NasdaqGS: DELL) earnings and slowing momentum in Apple (NasdaqGS: AAPL) shares. [Nasdaq ETF Gains]

Bank ETFs were higher Tuesday in the face of a down market, benefiting from a 2% rise in JP Morgan as the company held its annual shareholder meeting. Chief Executive Jamie Dimon told shareholders the economy could be at the beginning of a self-sustaining recovery, Reuters reported. The JP Morgan CEO also apologized for mistakes the bank made in handling foreclosures, Bloomberg reported. SPDR KBW Bank ETF (NYSEArca: KBE) closed up 1.63% on Tuesday. JP Morgan is the top holding at 8.6% of the portfolio. [JP Morgan Leads Bank ETFs as Shareholders Meet]

Stocks have been under pressure this week as the Dow shed more than 100 points Tuesday, but so far ETFs that profit from higher market volatility aren’t signaling widespread investor fear. However, investors have been shifting their sector preferences and this could be a more subtle indication of a change in mood. The $1.4 billion iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX) dropped 2% on Tuesday. The exchange traded note, which tracks futures based on the CBOE Volatility Index or Wall Street’s fear gauge, was down 35.7% so far this year through Monday’s close, according to Morningstar. [VIX ETFs Relatively Quiet as Stocks Fall]

ETFs that invest in small-cap stocks have fallen through their 50-day moving average in this week’s selling, breaching a key technical level. However, they rallied back from a similar setback in March. The $16 billion iShares Russell 2000 (NYSEArca: IWM), an ETF tracking a popular index of U.S. small caps, traded lower Tuesday. [Small-Cap ETF Fall Through 50-Day Average]

Gregory A. Clay contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.