Strong earnings reports and guidance from technology companies
plus upbeat housing data powered exchange traded funds higher
across the board Wednesday.
PowerShares Dynamic Networking (
) soared 4.9%, outpacing all non-leveraged ETFs. One of its
top-10 holdings,Amphenol (
), raised its full-year 2012 profit and revenue forecasts. Shares
of the maker of fiber optic cable used in the electronics,
communications and aerospace industries rocketed 16% -- the most
in more than three years -- leading the rally in the S&P
PXQ's other top holdings clocked robust gains in
) blasted nearly 12%.F5 Networks (
) vaulted 8%.Ciena (
) spiked 7%.
PXQ has been in a downtrend since the beginning of April.
Whether PXQ's move Wednesday is a counter-trend rally in a
downtrend or the start of a new uptrend remains to be seen. It's
trading below its long-term 200-day moving average, where price
moves tend to be most volatile.
PXQ has a very weak IBD Relative Strength and
Accumulation-Distribution Ratings combination of 22 and E. That
means the ETF is lagging 78% of the issues on the market, and
institutions are heavily selling shares.
SPDR S&P Semiconductor (XSD) vaulted 4.39% afterIntel
(INTC) released second-quarter results and lowered its outlook
for the current quarter, which wasn't as bad as analysts had
expected. Deutsche Bank rated the world's largest chip-maker a
"Intel achieved its volume goals for ultrabooks in the first
half of 2012 and expects a strong ramp in the second half of 2012
on the back of 140 design wins across traditional notebooks,
convertibles and tablets," Deutsche Bank's research analysts Ross
Seymore and Bob Gujavarty wrote in a client note.
"The company continues to win new designs in handsets and
tablets and expects more than 20 Intel tablets based on its
mobile SoCs (systems-on-chip) to come to market timed with
Windows 8 (Microsoft's operating system). Intel believes it
gained MPU (microprocessor) share in the quarter and those gains
are likely to extend into the third quarter of 2012."
Credit Suisse rated Intel shares outperform. Intel is
"tactically a levered play on reaccelerating emerging market
gross domestic product" growth, Credit Suisse's analysts
"Macro (economic) risks still persist, but no more so for
Intel than the rest of the semiconductor group and the stock
market," they added.
IBD's complete story on Intel by Patrick Seitz can be found
XSD is also trading below its 200-day moving average and has
also been downtrending. It appears to have found price support at
$40 a share. It has a weak 17 RS Rating and E
New data show the housing market may be on the mend. U.S. home
construction in June rose by 6.9% from May's levels and 23.6%
year over year, beating expectations. It reached its highest
level in four years, according to the Commerce Department. New
construction of new single-family homes -- which is less volatile
than apartment starts -- hit a two-year high.
In afternoon trade, theSPDR S&P 500 (SPY) climbed
SPDR Dow Jones Industrial Average (DIA) surged 0.83%.
PowerShares QQQ (QQQ), a basket of the largest-100
non-financial stocks on the Nasdaq, soared 1.42%.
All three indexes regained their short-term, 50-day moving
averages Friday and have been heading higher ever since. But the
uptrend is questionable considering the number of distribution
days the market has experienced since the follow-through day, as
you can see in IBD's
IShares MSCI EAFE Index (EFA), tracking developed foreign
markets, added 0.79%.
IShares MSCI Emerging Markets Index (EEM) shed 0.33%.
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