Financial, Energy ETFs Stem Tide
Financial and energy exchange-traded
funds swam against the crimson tide Monday as selling in tech and biotech issues
took their tradable funds down another peg.
The Energy SPDR
(
XLE |
Quote |
Chart |
News |
PowerRating) rose 2.1%,
the sharpest gain among the U.S.-focused exchange-traded
funds. Crude futures closed above $32 on the NYMEX as a hurricane
raised concerns of a possible production disruption in the Gulf of Mexico.Â
Among the Energy Spyder’s components,
Exxon Mobil
(
XOM |
Quote |
Chart |
News |
PowerRating) surged into new high ground. Schlumberger
(
XLB |
Quote |
Chart |
News |
PowerRating),
Chevron
(
CHV |
Quote |
Chart |
News |
PowerRating), and Royal Dutch Petroleum
(
RD |
Quote |
Chart |
News |
PowerRating) all logged gains.
Rising energy costs and falling stock
prices lower the likelihood of Federal Reserve tightening. That combination gave
a lift to interest-rate sensitive stocks and their related tradable funds.
The Financial SPDR
(
XLF |
Quote |
Chart |
News |
PowerRating) improved
1.3%, the Banking HOLDR
(
RKH |
Quote |
Chart |
News |
PowerRating) 1.0%, the Utilities SPDR
(
XLU |
Quote |
Chart |
News |
PowerRating) 0.7%, the
Utility HOLDR
(
UTH |
Quote |
Chart |
News |
PowerRating) 0.7%.
On the downside, the Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating)
fell 6.0%. The red ink in biotechs was paced by MedImmune
(
MEDI |
Quote |
Chart |
News |
PowerRating), which
fell on concerns about a sales slowdown of a respiratory disease drug developed
by the biotech. For my take on MedImmune’s chart,
check out my Trading
The News column.
The B2B Internet HOLDR
(
BHH |
Quote |
Chart |
News |
PowerRating)
dropped 7.9%, the heaviest loss among the ETFs. The Internet Infrastructure
HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating) 6.4%, the Dow Jones Internet Index iShares
(
IYV |
Quote |
Chart |
News |
PowerRating) 5.4%, the
Internet HOLDR
(
HHH |
Quote |
Chart |
News |
PowerRating) 3.8%, the Dow Jones Technology Index iShares
(
IYW |
Quote |
Chart |
News |
PowerRating)
2.3%, the Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) 2.2%.
If you’re new to exchange-traded funds,
be sure to visit TradingMarkets’ Knowledge Center,
dedicated to explaining the basics of trading and active investing in ETFs and
mutual funds. Just click on the Funds tab
near the top of this page, then click on the Knowledge
Center tab.Â
You also will find lessons on trading
exchange-traded funds in the Stocks Education area of TradingMarkets.com. In
particular, check out my three-part series on trading ETFs, starting with
Average Crossovers. I also recommend newcomers read my tutorial,
HOLDRs: Unique Opportunity And Risk.
All stocks and exchange-traded funds
are risky. In any new trade, reduce your risk by limiting your position size and
setting a protective price stop where you will sell your new buy or cover your
short in case the market turns against you. For an introduction to combining
price stops with position sizing, see my lesson,
Risky Business. For further treatment of these and related topics,
you’ll find extensive lessons in the Money
Management area of TradingMarkets’ Stocks Education section.