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ETF Trading Report: Financial, Tech ETFs In Focus

Eric Dutram

U.S. equity markets broadly surged in Tuesday’s trading session as tech stocks rallied throughout the day. The Dow and S&P 500 added about 1.5% each while the Nasdaq jumped 1.8% thanks to a nearly 5% move higher in Apple and gains of nearly 2.5% in Oracle.

Meanwhile in currency trading, the dollar was pretty much flat against a host of major developed market currencies although gains were especially strong against the Japanese yen in Tuesday trading. This flat trading in the dollar transferred over into a slight loss in bond markets as yields once again hit the 2.0% mark for the key 10 year Treasury bond note (read Three Great ETFs For Your IRA).

Commodity markets saw uncertain trading as products diverged wildly, even among their main groups. WTI crude added about 1.2% while natural gas slumped 3.1% in the energy market, while cocoa added 2.5% and wheat finished flat in the broad agricultural market.

Beyond these products, investors did some strength in the industrial metals segment—copper rose by about 1.7 cents—while precious metals trading was generally positive to close out the day.

Meanwhile, in ETF trading, most of the big name products saw light trading days despite the surge in performance during Tuesday’s session. In fact, SPY, QQQ, GLD, USO, and XLF all saw volume come in below their usual daily average.

However, this was not the case for all ETFs, as a few managed to see outsized trading volumes despite the low interest in many of the industry’s most famous products. Among these big trading volume winners were a number of sector ETFs as well as a few country specific funds.

In the sector space, trading was especially robust in the case of the iShares MSCI Dow Jones US Broker Dealers Index Fund (IAI). This ETF usually sees volume around 45,500 shares in a normal session, but saw 830,000 shares change hands during today’s trading (see Three Financial ETFs Outperforming XLF).

This surge in interest was largely due to some key earnings reports in some of the fund’s top holdings. The top allocation in the ETF—Goldman Sachs (GS)—reported earnings today while several other top companies report this week as well. Thanks to a decent report from GS, investors saw the increased volume result in a modest uptick in price as the ETF added 0.7% on the day, a decent performance but less than the broad market did in the session.

Another ETF that saw huge volumes was the Rydex S&P Equal Weight Technology ETF (RYT). This relatively popular fund experienced a spike in volume of 346,000 shares today, well above the 19,700 average that is usually seen in this product (read Three Technology ETFs Outperforming XLK).

This tech ETF was a huge beneficiary of the rebound in the sector that took place in Tuesday trading, although it was less so than what investors saw in market cap weighted products. That is because RYT devotes just 1.5% to Apple—one of the biggest winners today—while other tech funds have nearly a double digit allocation to the giant. Nonetheless, the tech rebound was pretty broad and helped carry most companies that are engaged in the sector higher during Tuesday’s trading session, although few saw the spike in volume that investors saw in RYT.

(See more on ETFs at the Zacks ETF Center)

Read the analyst report on RYT

Read the analyst report on GS

Read the analyst report on IAI

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