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ETF Trading Report: Oil Service, Networking ETFs in Focus

Eric Dutram

Stocks finally saw some movement today as equities fell across the board thanks to the uncertainty over Bernanke’s speech tomorrow at Jackson Hole, Wyoming, as well as slightly higher-than-expected jobless claims. The Dow finished the day lower by about 0.8%, while the S&P 500 also was lower by a similar amount as the Nasdaq led the way on the downside, sinking by about 1.1% on the day.

From a sector look, losses were pretty widespread, although tech, materials, and financials clearly led on the downside. Staples and utilizes were the big winners on the day, while health care was also relatively flat in today’s trading (read Invest like Mitt Romney with These Three ETFs).

Meanwhile, the U.S. dollar was moderately higher on the day, as the currency strengthened against most of the world’s major currencies. Additionally, safe haven bonds also had a good day from a price perspective, as American and German bonds saw yields fall, with German 10 year notes falling down to 1.32% to close out Thursday’s session, although Spanish and Italian securities did see rates rise on the day.

Commodities were more mixed during the day, as traders saw a further increase in the natural gas market, although oil and metals were all in the red. Soft commodities were also choppy, as coffee was down about 2% while cocoa and orange juice both saw gains exceeding 1% during today’s session (see Long-Term Treasury ETFs: The Ultimate QE3 Play).

ETF trading was a bit better today from a volume perspective, as trading levels reached levels that were about 2/3 of the usual average. Especially big moves were seen in the international, global, and mid cap markets, while activity was very light in the European ETF sphere, as well as the broad financial sector ahead of tomorrow’s key Jackson Hole meeting.

Once again, ETF investors saw a big trading day for the PowerShares Dynamic Oil & Gas Services Fund (PXJ). The product usually does about 40,000 shares in volume but was approaching one million shares in today’s trading session, marking two days in a row of extremely impressive volume (see Time to Buy Oil & Gas Equipment ETFs?).

However, much like yesterday’s session, the volume led to a decidedly negative trend, as the product lost almost 2% again today. Once again, traders looked to the hurricane for direction and clearly it was not to their liking. In fact, PXJ is now down almost 3% over the past five days with nearly all of the loss coming in the past two sessions.

Another ETF which was in focus today was the iShares S&P North America Tech-Multimedia Networking Fund (IGN). The product usually does volume in the 50,000 range, but today saw a spike in interest to the 270,000 share level (read Three Great Tech ETFs that Avoid Apple).

Interestingly, all of the top five components in the fund saw below average trading days, although all were lower on the day. This helped push IGN down about 2.7% during the day and another half a percent after hours as well. The trend was far worse than the overall market, and much of the volume came in the final hour of the day, suggesting that many traders were looking to get in or out of the product right at the close of the session.  

(see more in the Zacks ETF Center)

Read the analyst report on IGN

Read the analyst report on PXJ

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