Blue Chip Blues
Blue chip and
financial funds broke lower Friday, while most of the tech
funds and Spiders remained in trading ranges.
Exchange-Traded
Funds
The Financial SPDR
(
XLF |
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PowerRating) slumped 5%, breaking and closing below its 50-day
moving average for the first time in five weeks. It was the
Financial Spider’s second straight decline on expanding
volume. The tradable fund closed bearishly near the low of
the session. The fund posted the biggest loss among the
exchange-traded funds.
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Banks and other
financials fell Thursday after an earnings warning from
Wachovia
(
WA |
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PowerRating) cast a pall over the industry. On Friday,
concerns spread that tightening rates and a slowing economy
will put the squeeze on the financial company profits.
Dow component J.P.
Morgan
(
JPM |
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Chart |
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PowerRating) slid 8 9/16 to 117 15/16 on nearly three
times normal volume. American Express
(
AXP |
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News |
PowerRating), another Dow
stock, dropped 4 to 51 1/2 on twice its usual trade.
The weakness in
financials dragged down the Dow Jones industrial average and
its tracking fund, the Diamonds
(
DIA |
Quote |
Chart |
News |
PowerRating), which lost 2.2%
on surging volume. The exchange-traded fund descended to its
lowest close since May 26.
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The Biotech HOLDR
(
BBH |
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News |
PowerRating) gained 3.6%, the day’s biggest gain among the
exchange-traded funds. The HOLDR closed just below tight
trading range resistance.
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Mutual
Funds
The strength in
biotechs carried into the mutual funds focused on the
sector. The Rydex Biotechnology Adv fund
(
RYOAX |
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News |
PowerRating) added
5.2% in Net Asset Value.
Energy sector
funds also did well. Rydex Energy Services
(
RYVIX |
Quote |
Chart |
News |
PowerRating)
picked up 3.9% in NAV, Fidelity Select Energy Service
(
FSESX |
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Chart |
News |
PowerRating)
3.8%, and Icon Energy
(
ICENX |
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Chart |
News |
PowerRating) 2.8%.