Tradable Financial, Tech Funds Surge
Tradable funds
focused on tech and financial stocks forged ahead Thursday
as evidence of declining factory orders eased interest-rate
fears. Financial funds also rode investment banks, which
surged on takeover speculation following the Credit Suisse-DLJ
merger deal.
Merrill Lynch’s
Internet Infrastructure HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating) jumped 3.4%, the
day’s biggest gain among the
funds. Verisign
(
VRSN |
Quote |
Chart |
News |
PowerRating), which holds the largest
weighting in the HOLDR, rose 5 1/8 to 198 7/8. Among the
HOLDR’s other components, BEA Systems
(
BEAS |
Quote |
Chart |
News |
PowerRating) gained 4
9/16 to 68 1/16, Akamai Technologies
(
AKAM |
Quote |
Chart |
News |
PowerRating) 3 1/16 to
75 9/16, Inktomi
(
INKT |
Quote |
Chart |
News |
PowerRating) 4 3/8 to 130 3/8.
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The Nasdaq 100
Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating), which correlates with the
performance of the top 100 non-financial stocks by market
cap in the Nasdaq, tacked on 2.8%. The Internet Architecture
HOLDR
(
IAH |
Quote |
Chart |
News |
PowerRating) rose 2.5%, the Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating)
1.9%, the Technology SPDR
(
XLK |
Quote |
Chart |
News |
PowerRating) 1.9%, the Dow Jones
Technology Index iShares
(
IYW |
Quote |
Chart |
News |
PowerRating) 1.9%.
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The Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating) climbed 3.3%, clearing a handle in an eight-week
consolidation zone within a larger base. This is a good
example of a "cheat" play for traders who seek
earlier entries in correction-recovery patterns rather than
waiting for the breakout to new high ground. For more on
this tactic, check out my
29 Trading The News commentary.
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Among the
rate-sensitive ETFs, the Financial SPDR
(
XLF |
Quote |
Chart |
News |
PowerRating) piled on
2.6% on heavy volume. The Dow Jones Financial iShares
(
IYF |
Quote |
Chart |
News |
PowerRating)
added 2.5%, the Regional Banking HOLDR
(
RKH |
Quote |
Chart |
News |
PowerRating) 2.4%.
The sector
benefited from further evidence that the U.S. economy is
slowing, which raised hopes that interest rates have peaked.
Among data issued Thursday, the government’s manufacturing
activity report showed factory orders fell 7.5% in July, the
sharpest drop on record. J.P. Morgan
(
JPM |
Quote |
Chart |
News |
PowerRating) charged ahead
14 3/8 to 166 1/4 on merger speculation. Lehman Bros
Holdings
(
LEH |
Quote |
Chart |
News |
PowerRating), another presumed takeover candidate,
picked up 4 53/256 to 145 5/256.
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Thursday’s rally
was a broad one for the tradable funds. For example, the
Diamonds
(
DIA |
Quote |
Chart |
News |
PowerRating), which track the Dow Jones industrial
average, rose 1.2%; the Basic Industries SPDR
(
XLB |
Quote |
Chart |
News |
PowerRating)
1.1%.
The biggest loss
in the U.S.-focused exchange-traded funds came from the
Cyclicals/Transportation SPDR
(
XLY |
Quote |
Chart |
News |
PowerRating), which dropped 1.4%.
Retailers put a drag on the tradable fund.
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