Nextel Clocks Wireless HOLDR
The wireless and Net HOLDRs led the
exchange-traded funds lower. Once again, not a single U.S.-focused tradable fund
registered a gain of 1% or more.
The Wireless HOLDR
(
WMH |
Quote |
Chart |
News |
PowerRating) shed
7.5%, hit hard by a 28.4% decline in Nextel Communications
(
NXTL |
Quote |
Chart |
News |
PowerRating) and a
20.8% in Nextel Partners
(
NXTP |
Quote |
Chart |
News |
PowerRating). Nextel Communications warned that Q1
results will be hurt by the slowing U.S. economy and higher costs.
The B2B Internet HOLDR
(
BHH |
Quote |
Chart |
News |
PowerRating) fell
6.3%, the Internet Infrastructure HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating) 4.8%, the Broadband HOLDR
(
BDH |
Quote |
Chart |
News |
PowerRating)
4.8%, the Telecom HOLDR
(
TTH |
Quote |
Chart |
News |
PowerRating) 4.7%.
Japan’s banking woes weighed heavily
on the U.S. finance ETFs. The Financial SPDR
(
XLF |
Quote |
Chart |
News |
PowerRating) declined 4.7%, the Dow
Jones Financial iShares
(
IYF |
Quote |
Chart |
News |
PowerRating) 4.4%, the Dow Jones Financial Services iShares
(
IYG |
Quote |
Chart |
News |
PowerRating) 4.3%, the Regional Banking HOLDR
(
RKH |
Quote |
Chart |
News |
PowerRating) 4.0%.
Exchange-traded funds combine traits
of stocks and mutual funds. Like mutual funds, an ETF represents diversified
ownership in a number of different stocks, reducing company-specific
risk. Like stocks, ETFs trade on exchanges, nearly all of them in fact trade on
the American Stock Exchange. They quote throughout the day, enabling
traders to take advantage of intraday price moves.
If you’re new 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.