WorldCom Whacks Telecom ETFs
Tradable funds focused on tech and
growth led the market higher while exchange-traded funds focused on the telecom
sector took a hit from WorldCom.
The Internet HOLDR
(
HHH |
Quote |
Chart |
News |
PowerRating) gained
4.4%, the day’s sharpest rise among the U.S.-focused exchange-traded
funds. The Biotech HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating) 3.9%, the Dow Jones Internet
iShares
(
IYV |
Quote |
Chart |
News |
PowerRating) picked up 3.4%, the Internet Infrastructure HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating)
3.1%.
The energy ETFs got a lift from rising
natural gas prices. The Energy SPDR
(
XLE |
Quote |
Chart |
News |
PowerRating) pulled ahead 3.1%, the Dow Jones
Energy iShares
(
IYE |
Quote |
Chart |
News |
PowerRating) 2.9%. For more on the action in energy futures, check
out Mark DuPee’s commentary.
On the downside, the Telecom HOLDR
(
TTH |
Quote |
Chart |
News |
PowerRating)
lost 5.6%, the Dow Jones Telecommunications iShares
(
IYZ |
Quote |
Chart |
News |
PowerRating) 3.9%. The ETFs
took a hit from WorldCom
(
WCOM |
Quote |
Chart |
News |
PowerRating), which tumbled 20.3% after the company
slashed its profit and sales outlook through 2001 and said it would create
tracking stocks for its data and Internet businesses.
The Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) gave
back 3.6%, the Broadband HOLDR
(
BDH |
Quote |
Chart |
News |
PowerRating) 3.1%.
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
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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
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