Exchange traded funds globally cheered the German high court's
approval of the eurozone's new bailout fund Wednesday. Germany
cleared a major hurdle in dealing with the EU debt crisis.
Traders are now focused on the Federal Reserve meeting starting
Here's a performance overview of the major ETFs:
MSCI EAFE Index (
), tracking developed foreign markets, +0.52%, hit a four-month
MSCI Emerging Markets Index (
), +0.22%, continued climbing above its 200-day line to confirm a
SPDR S&P 500
), +0.18%, trades near a five-year high.
PowerShares QQQ (
), tracking the 100 largest nonfinancial stocks on the Nasdaq,
erased early gains, falling 0.13% asApple (
) turned lower on a lackluster response to the iPhone 5.
SPDR Dow Jones Industrial Average (DIA), +0.13%, rose to its
highest level since January 2008.
September is historically the worst month of the year for
stocks. But the S&P is defying history with a 1.93% rise
month-to-date. It's rallied 13.5% off its June low and a whopping
"Stocks shouldn't be doing so well," wrote Ed Yardeni,
president and chief investment strategist of Yardeni Research.
"However, they've been on performance-enhancing drugs provided by
the Fed and the ECB (European Central Bank)."
"But the month isn't over. Then there is always October, which
has had a knack for some wicked selloffs," Yardeni added.
"However, they often proved to be great buying
Trading volume slowed as investors eagerly await the Federal
Reserve meeting Thursday and Friday when it's expected to
announce a third round of quantitative easing to support the
"Investors seem to be assuming -- rightly or wrongly -- that
policymakers in both Europe and the U.S. will be able to manage
through the European debt crisis and the U.S. fiscal cliff and
some of the bearish fears associated with these issues have
shrunk," Bob Doll, senior advisor at BlackRock, wrote in a weekly
client note. "From a fundamental perspective, valuations have
been and still are attractive relative to alternatives."
Whether the rally can be sustained depends upon policymakers
in China, Europe and the U.S., Doll added.
The market may have already priced in additional stimulus and
there's more upside potential than downside risks, some market
"The reality is most hedge funds have missed this summer rally
completely," said Ryan Detrick, senior technical strategist at
Schaeffer's Investment Research in Cincinnati. "Now they are
forced to play catch-up. This increases the odds that they'll be
forced to aggressively buy any and all pullbacks."
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