Markets

Stock ETFs Broadly Lower As Fresh Rate-Hike Fears Rear Up

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Major stock market index ETFs broke lower Friday amid renewed concerns that the Fed will raise interests rates soon.

SPDR S&P 500 ( SPY ) plunged 1.4%, slicing under its 50-day moving average for the first time since late June.

[ibdchart symbol="spy" type="weekly" size="full" position="leftchart" ]

All stock market sectors were lower near midday, with SPDR Gold Trust ( GLD ) and Financial Services Select Sector SPDR ( XLFS ) down the least by 0.3% and 0.4%, respectively. Real Estate Select Sector SPDR ( XLRE ) was down the most, by 2.8%.

Comments from Boston Fed President Eric Rosengren, traditionally seen as a dovish policymaker, fueled negative sentiment. He didn't really say anything earth-shattering, other than to say he backs gradual interest-rate hikes. The Fed has three meetings left this year: Sept. 20-21, Nov. 1-2 and Dec. 13-14. Futures traders think there's a 30% chance the Fed will hike at the September meeting, but the chances rise to around 60% in December.

XLFS holdings Bank of America ( BAC ), Citigrou p (C) and US Bancorp (USB) were up as much as 0.7%. JPMorgan Chas e (JPM) was off 0.5% on an analyst downgrade. Top holding Berkshire Hathaway (BRKB) was down 1.9%. Insurers MetLife (MET) was up 2.0% and American International Group (AIG) was about flat.

Financial Select Sector SPDR (XLF), whose broader holdings include real estate, was down 0.9%.

XLRE holdings seeing declines include top holding Simon Property (SPG), down 3.0%; American Tower (AMT), down 4.2%; and Crown Castle Internationa l (CCI), down 3.3%.

Vanguard REIT ETF (VNQ) and iShares U.S. Real Estate (IYR) were down 3.%

Technology ETFs also took a hit. Technology Select Sector SPDR (XLK), Vanguard Information Technology (VGT), First Trust Down Jones Internet (FDN) and iShares U.S. Technology (IYW) were all down as much as 1.5%.

IShares PHLX Semiconductor (SOXX) and VanEck Vectors Semiconductor (SMH) were down 2.8% in their biggest drops in more than three months.

Utility ETFs suffered, with Utilities Select Sector SPDR (XLU) off 2.3%.

Energy also took it on the nose as Energy Select Sector SPDR (XLE) dropped 2.1%.

United States Oil (USO), a commodity ETF that tracks the price of West Texas intermediate crude, fell 2.6%, ending its four-day rally but holding above its 50-day moving average.

GLD tracks the price of gold bullion and is testing support at its 50-day line. It's 2% off its 52-week high. Gold tends to fall when interest rates rise and the dollar strengthens. Higher rates tend to raise the opportunity cost of holding gold, a nonyielding safe-haven asset, while boosting the dollar in which it is priced.

VanEck Vectors Gold Miners (GDX) tumbled 3.5% to 26.91. That took a big chunk out of its rally from about 25, which started on Sept. 1, and ends its first stab at retaking its 50-day line.

PowerShares DB U.S.$ Bullish (UUP) gapped up 0.5%. It remains under both its 200-day and 50-day moving averages. Top holding Newmont Mining (NEM) was down 2.9%. Other big decliners were Newcrest Mining (NCM), down 3.2%; Agnico Eagle Mines (AEM), down 3.7%; and Kinross Gold (K), down 4.7%.

IPath S&P 500 VIX Short Term Futures ETN (VXX) leapt 8.4%. The ETN's price movements reflect the implied volatility of the S&P 500.

12 Bellwether ETFs

Here's how major exchange traded funds across major asset classes performed today, with IBD Relative Price Strength Ratings.

The RS Rating is a measure of a stock's price performance over the last 12 months, compared with all stocks and ETFs, on a scale of 1 to a best-possible 99.

Following daily ETF market action can be key to successful investing:

SPDR S&P 500 ( SPY ), -1.2%, RS 53

PowerShares QQQ (QQQ), -1.3%, RS 57

SPDR Dow Jones Industrial Average (DIA), -1.1%, RS 49

IShares Core S&P Mid-Cap (IJH), -1.7%, RS 61

IShares Russell 2000 (IWM), -1.7%, RS 63

IShares MSCI EAFE (EFA), -1.3%, RS 35

Vanguard FTSE Emerging Markets (VWO), -2.2%, RS 73

SPDR Gold Shares ( GLD ), -0.3%, RS 69

United States Oil (USO), -2.1%, RS 16

IShares Core U.S. Aggregate Bond (AGG), -0.4%, RS 35

PowerShares DB U.S.$ Bullish (UUP), +0.4%, RS 25

IPath S&P 500 VIX Short-Term Futures (VXX), +7.3%, RS 1

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


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

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