Cyclicals Get Their Turn
Tuesday looked
like another day of back-and-forth cash flow, judging by the
performance of the exchange-traded funds. After techs and
financials rallied on growing rate optimism, it was the turn
of blue chips and cyclicals.
Stocks and funds
in those sectors led a mixed market after the government
released strong productivity data. The Labor Department
reported that worker output per hour increased in the second
quarter at an annualized rate of 5.3%, the sharpest
productivity gain since 1983. The news increased confidence
that the Federal Reserve will remain on hold Aug. 22 when
policymakers meet to decide short-term interest rates.
The
Cyclicals/Transportation SPDR
(
XLY |
Quote |
Chart |
News |
PowerRating) jumped 2.9%. The
tradable fund got a boost from the retail sector, which got
a lift from Street-beating earnings by Staples. For an
analysis of Staples’ activity, check out my latest
The News column.
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Among the Spider’s
biggest components, Wal-Mart rose 2 1/2 to 57 5/8, Home
Depot
(
HD |
Quote |
Chart |
News |
PowerRating) 2 to 57, The Gap
(
GPS |
Quote |
Chart |
News |
PowerRating) 1 7/16 to 31 11/16,
and Kohl’s
(
KSS |
Quote |
Chart |
News |
PowerRating) 3 3/4 to 62 3/8. Two of the most
constructive charts belong to Home Depot and Kohl’s.
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The Basic
Industries SPDR
(
XLB |
Quote |
Chart |
News |
PowerRating) gained 2.5%, crossing its 50-day
moving average. The tradable fund got a lift from its paper
stocks. Among its components, Weyerhaeuser
(
WY |
Quote |
Chart |
News |
PowerRating) rose 2
1/16 to 49 15/16, International Paper
(
IP |
Quote |
Chart |
News |
PowerRating) 1 11/16 to 35
1/2.
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Techs turned in a
mixed performance. On the upside, the tech-heavy Nasdaq 100
Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating) added 1.3%, edging above its 50-day
moving average. Note that this represents a divergence with
the Nasdaq 100 Index
(
$NDX.X |
Quote |
Chart |
News |
PowerRating), which lost 0.7%. The
B2B HOLDR
(
BHH |
Quote |
Chart |
News |
PowerRating) climbed 2.1%.
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On the downside,
the Telecom HOLDR
(
TTH |
Quote |
Chart |
News |
PowerRating) lost 3.9%, the day’s biggest
lost among the exchange-traded funds. The basket of telecom
stocks sank to a new low, as did AT&T
(
T |
Quote |
Chart |
News |
PowerRating), one of the
HOLDR’s largest holdings. Lucent Technologies
(
LU |
Quote |
Chart |
News |
PowerRating) also
plumbed new depths. The Dow Jones Telecom iShares
(
IYZ |
Quote |
Chart |
News |
PowerRating)
fell 3.3%, the Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating) 2.0%, the Internet
Infrastructure HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating) 1.8%.
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