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
In afternoon trade, the
SPDR S&P 500
) 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
SPDR Dow Jones Industrial Average (
) climbed 0.63%.
PowerShares QQQ (
), a basket of the 100 largest nonfinancial stocks on the Nasdaq,
SPY, DIA and QQQ all hit four-month highs and are trading 1%
to 2% below their 52-week highs. But
iShares Russell 2000
), a benchmark for small-cap stocks, lags and trades 5% below its
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
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 (
), 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
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 was projected to climb $10 billion in June,
after rising $17.1 billion the prior month -- the most in five
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