Gains in exchange traded funds at the open Tuesday fizzled
away by the afternoon as Spain's rescue package failed to impress
United States Natural Gas (
), -3.86%, lost the most among non-leveraged ETFs.First Trust
ISE-Revere Natural Gas Index (
), a basket of producers and explorers, fell 2.27%.
U.S. natural gas stockpiles as of June's end climbed 23% from
the year-ago period to about 3.1 trillion cubic feet, according
to the U.S. Energy Information Administration. Inventories are
23% higher than the five-year average. In its Short-Term Energy
Outlook released Tuesday, the EIA stated it expects natgas stores
to soar to a record of 4 trillion cubic feet by the end of
October thanks to increases in shale gas production.
The EIA estimates natgas will average $2.58 per million
British thermal units (MMBtu) in 2012. That's 36% lower than last
year's average price of $4.00 per MMBtu. The commodity is
forecast to trade at $3.22 per MMBtu on average in 2013.
Record-low prices have spurred electric power producers to opt
for natgas over coal. Power producers are seen increasing natgas
consumption by 21% this year. Total residential and commercial
consumption this year will rise nearly 5% over last year.
Semiconductor Sell Off
Advanced Micro Devices (
), -11.3%, andCirrus Logic (
), -8.66%, led a selloff in semiconductors.SPDR S&P
), which tracks chip makers in the S&P 500, fell 2.39%.
AMD issued a dismal second-quarter guidance late Monday citing
weak sales in China and Europe and lower-than-expected consumer
demand. The company expects revenue to fall 11% from the first
quarter, which was lower than its prior forecast of a 0% to 6%
Applied Materials (AMAT), -2.81%, lowered its full-year
guidance because of weaker-than-expected demand in its chip
After gapping up 0.5% at the open, the
SPDR S&P 500
(SPY) spent the rest of the morning giving back its gains. It's
down 0.51% in afternoon trade.SPDR Dow Jones Industrial Average
(DIA) fell 0.39%.PowerShares QQQ (QQQ), a basket of the largest
100 nonfinancial stocks on the Nasdaq, dropped 0.63%.
All three are struggling to hold above their short-term 50-day
IShares MSCI EAFE Index (EFA), tracking developed foreign
markets, gave back 0.28%. The euro fell to a two-year low against
the dollar and a five-year low against the yen. European leaders
agreed to give Spain 30 billion euros ($37 billion) in aid to
shore up its troubled banks.
IShares MSCI Emerging Markets Index (EEM) lost 0.57%. More
data from China signaled slowing demand in the world's
second-largest economy. China's imports in June grew at half the
expected rate, suggesting that domestic demand is waning.
Both EFA and EEM appear to have hit price resistance at their
200-day moving averages, a key technical level.
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