American markets surged to end the quarter as hopes for progress
in Europe sparked the bulls in Friday trading. European leaders
agreed in principle to come up with
measures that will stabilize
Spanish and Italian bond markets via the European Stability
Mechanism.
Many investors viewed this as a big step towards a more
integrated Europe and one that could also help the trillion dollar
economies from experiencing a Greek-like run on their bonds. Thanks
to this, the Dow jumped by 2.2% while the S&P 500 added 2.5%
and the Nasdaq surged by 3% to close out the week.
Unsurprisingly given these index performances, most stocks were
up significantly in Friday trading. Banks, tech, and basic
materials were among the biggest winners, while health care plans,
utilities, and telecom were underperformers on the session (see
The Guide to the 25 Most Liquid ETFs
).
The euro report also had a huge impact on the currency market as
the dollar index fell by about $1.00 and the euro currency itself
added more than two cents against the greenback in Friday trading.
Investors saw similar strength in the pound, helping to push
investors out of government bonds in the process, sending 10 Year
yields up to 1.66%.
With this broad risk on trade, commodities were star performers
in Friday's session, led by a 5% jump in copper, a 4.4% move higher
in silver, and whopping 9.2% surge in WTI crude oil. Pretty much
all the rest of the softs were up as well, with only rough rice
slipping into the red in the final day of the quarter.
Thanks in part to the big moves in many sectors of the market,
ETF trading was relatively robust, especially considering the low
trading levels that we have been seeing as of late. In particular,
ETF investors saw strong volume levels in commodity ETFs while a
few international products also experienced a great deal of
interest as well.
One fund that was definitely in focus to finish the quarter was
the
United States Oil ETF (
USO
)
. This product usually trades about 7.9 million shares a day but
spiked to just over 20.5 million shares today thanks to the renewed
interest in the commodity after today's European summit (read
When Do You Buy Oil?
).
Clearly, investors in the oil market believe that something to
spur demand has been reached in Europe, pushing traders back into
the commodity and boosting USO by 7.9% in the session. Trading
volume was relatively well spread out during the day and the surge
was also probably the result of some bargain buying as USO was down
roughly 25% over the quarter before today's impressive move
higher.
Another product that was a big mover on the day was the
iShares MSCI Spain Index Fund (
EWP
)
. The product usually sees volume of about 756,000 shares but saw a
spike to just over two million during today's trading session (see
Beyond The PIIGS, Three Troubled European ETFs to
Watch
).
Apparently today's promise to bail out Spanish banks from the
ESM was great news for investments in the Spanish ETF as the
product soared by 7.3% on the day. This isn't that surprising as
financial services in the country have been severely beaten down
and account for nearly 40% of the ETF, suggesting that as they go
so does this popular fund from iShares.
(see more on ETFs at the
Zacks ETF Center
)
ISHARS-SPAIN (EWP): ETF Research Reports
US-OIL FUND LP (USO): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment
Research
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for the
Next 30 Days. Click to get this free report