U.S. stock indexes were narrowly mixed Friday heading in to the final trading day of September.
[ibd-display-video id=2323711 width=50 float=left autostart=true]PowerShares QQQ Trust ( QQQ ) held a 0.3% gain, SPDR S&P 500 ( SPY ) was up a fraction and SPDR Dow Jones Industrial Average ( DIA ) was down 0.1%. Emerging markets rallied in the stock market today with iShares MSCI Emerging Markets ( EEM ) rising 0.9% as it finds support at the 50-day moving average.
Banks, homebuilders and telecom led the upside among sector funds, while energy, biotech and gold miners lagged. SPDR S&P Bank ( KBE ) and SPDR S&P Regional Banking (KRE) gained nearly 1% each. Both ETFs have advanced in all but one of the past 16 sessions. They're back above their 50-day moving average lines as they continue to consolidate.
IShares US Home Construction (ITB) climbed 1% to its highest level in more than a decade. Component stock KB HomeKBH soared 9% after reporting earnings late Thursday. It's now just shy of a 24.47 buy point of a three-month base.
Gold and oil plays dipped along with their underlying commodity prices.
Big Names, Big Gains?
Two very different equity plays that hold big names are in buy range as the stock market resumes its march to record highs.
PowerShares Buyback Achievers (PKW) is in buy range after clearing a 55.02 entry of a flat base on Wednesday. It climbed 3% from a June breakout from a prior flat base to the start of the most recent pattern.
The fund, which has attracted $1.3 billion since its December 2006 launch, tracks the Nasdaq US Buyback Achievers Index. PKW invests in U.S. companies that have trimmed shares outstanding by 5% or more in the trailing 12 months via stock buybacks. The holdings are then weighted by market cap.
Industrials represented the biggest sector weighting as of Sept. 27, at 27% of assets, according to Morningstar Direct. Financial services and consumer cyclical weighed in at 25% and 22%, respectively. Technology and health care made up about 9% apiece.
PKW counted Boeing (BA), Gilead Sciences (GILD), McDonald's (MCD), General Electric (GE) and United Technologies (UTX) among its top holdings. Because the holdings are subject to an initial 5% cap, the top five stocks made up 25% of assets.
The fund lags the S&P 500 with a year-to-date return of 10.4% vs. the benchmark index's 13.7% gain. Its average annual return of 14.4% over the past five years is roughly in line with the S&P 500, and a 9.3% five-year return is ahead of the S&P 500's 7.4% advance. Its expense ratio is 0.63%.
IBD'S TAKE:Keeping an eye on industry group action is vital to investing. Check IBD's daily Industry Sub-Group Rankings list to find out where biotechs rank among the 197 industry groups tracked by IBD.
IShares Nasdaq Biotechnology (IBB) is still in buy range from a 330 flat base cleared Aug. 31. It rose nearly 9% from a prior flat-base breakout in mid-June to the start of the most recent pattern. The fund was featured in this Aug. 10 ETF column as it sought support near the 50-day moving average . While it took a dip below the line to form the bottom of a flat base, shares advanced as much as 7% after retaking the 50-day.
IBB, which has amassed $10.3 billion since its February 2001 launch, tracks the Nasdaq Biotechnology Index. Its top holdings as of Sept. 27 included Amgen (AMGN), Celgene (CELG), Gilead Sciences (GILD) and Biogen (BIIB). The top five names accounted for nearly 40% of total assets.
The fund is beating the S&P 500 year to date with a 24.6% return. It lags the S&P 500 with a three-year average annual return of 6.2% vs. 10.4%, but has outperformed over the past five, 10 and 15 years with respective gains of 18.5%, 15% and 14.2%. The fund bears a 0.47% expense ratio.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.