U.S. stocks faced a rough session to open the week as European
issues once again were the main concern in the marketplace. Today,
it was mostly focused on Spain, as yields for the country's
benchmark 10 year debt briefly hit 7.5% while the nation also
announced that it was banning short-selling on all its stocks.
Thanks to this, many European exchanges were down more than 2%
on the day while U.S. stocks also started the day deep in the red
although they did manage to recoup some of their losses on the
session. Still, the Dow finished lower by 0.8% while the S&P
500 slumped by 0.9% and the Nasdaq led the big three lower, losing
1.2% on the session (read
Three Defensive ETFs for a Bear Market
In terms of sectors, investors saw weakness across the board
with big losses coming in the banks, big tech, and materials. A few
winners were seen in some of the telecom names while a few of the
staples also managed to hold up better than most as well.
However, thanks to this risk off sentiment, the ten year
Treasury bond continued to fall, going below the 1.45% level while
the dollar index rose modestly on the day. Meanwhile in
commodities, crude was a big loser, falling by about 4%, while the
rest of the space also saw weakness in the tumultuous session (see
Top Commodity ETFs in this Uncertain Market
ETF trading was somewhat light, although a number of products
did see volume in line with their averages. Gold investments
continued to see lower volume levels, although European and bond
ETFs were big movers on the day.
One product in particular which attracted a great deal of
interest was the iShares
Dow Jones US Aerospace & Defense ETF (
. The product saw volume that was roughly triple the daily average,
although it did slump about 1.3% on the day (read
Can The Defense ETFs Soar Despite Headwinds?
The fund seems to be in focus thanks to the broad slowdown and
fears over cuts in spending both in the U.S. and the broad European
aerospace and defense markets. These worries, along with the fact
that all five of the fund's top holdings are reporting before the
end of the week, helped push this ETF to a higher-than-normal
trading level during Monday's session.
Another fund which saw a great deal of interest was the
iShares Barclays 3-7 Year Treasury Bond Fund (
. The product usually sees about half a million shares move hands
during a normal session but interest spiked to just over 2.3
million during today's trading.
Interestingly, the fund was pretty much flat on the day,
although bond investing is clearly more in focus thanks to worries
over a global slowdown and higher demand for safe havens. It is
also worth noting that a great deal of the volume came in the form
of three block trades as 1.8 million shares moved hands in just
three blocks that were relatively spread out across the day.
(see more in the
Author is long ITA.
ISHARS-BR 3-7TB (IEI): ETF Research Reports
ISHARS-DJ AEROS (ITA): ETF Research Reports
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