Major ETFs Rise For A Third Straight Day

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Major ETFs rallied for a third straight day Tuesday on news that U.S. employers in June listed the most job openings in four years, offsetting concerns that the U.S. economy is slowing. In addition, the Federal Reserve released consumer credit data for June.

Market Overview

In afternoon trade, the SPDR S&P 500 ( SPY ) added 0.76%. Semiconductors, metals and mining and energy rose the most, gaining 1.6% to 2.8%. Real estate investment trusts, or REITs, telecom and utilities were the weakest, losing 0.6% to 1%.

SPDR Dow Jones Industrial Average ( DIA ) climbed 0.63%.

PowerShares QQQ ( QQQ ), a basket of the 100 largest nonfinancial stocks on the Nasdaq, jumped 1.04%.

SPY, DIA and QQQ all hit four-month highs and are trading 1% to 2% below their 52-week highs. But iShares Russell 2000 Index ( IWM ), a benchmark for small-cap stocks, lags and trades 5% below its 52-week high.

IWM has been making lower highs while the large-cap indexes have been making higher highs in low volume typical of summer. This suggests market internals are weak and that investor appetite for risk is low.

"Underperformance by small-cap stocks can be a problem because it can reveal liquidity problems that might one day affect the overall market," Tom McClellan, publisher of the McClellan Market Report, wrote in his daily newsletter. "But the underperformance of the Russell 2000 has been extreme enough to imply that it has gotten overdone."

The S&P 500 zigzagged the past month, indicating lack of investor conviction, says Ron DeLegge, editor of ETFGuide.com

"Breadth and momentum indicators are also not confirming the price moves, which are warning signs for bulls," DeLegge wrote to clients. "We are looking for at least a short-term top soon, which very well could turn into a longer term top."

IShares MSCI EAFE Index ( EFA ), tracking developed foreign markets, rose 1.01%.

IShares MSCI Emerging Markets Index (EEM) picked up 0.52%.

U.S. Job Openings

Employers added the most jobs in five months in June, which means they could be hiring in the coming months as it takes a few months to fill an opening. Job openings rose to 3.76 million -- the highest since July 2008 -- from 3.66 million in May, the Labor Department reported in its monthly Job Openings and Labor Turnover Survey.

Work remains hard to come by, with an average of 3.4 people unemployed for every opening. In a healthy job market, there's usually two unemployed per job. The ratio has improved drastically since July 2009, when it was nearly 7-to-1.

Consumer Credit

Consumer credit was projected to climb $10 billion in June, after rising $17.1 billion the prior month -- the most in five months.

Follow Trang Ho on Twitter @TrangHoETFs .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: DIA , EFA , IWM , QQQ , SPY

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