ETF Trading Report: Large Cap Blend, Oil ETFs In Focus - ETF News And Commentary
June 21 2012 - 1:07PM
Zacks
U.S stocks plunged across the board in Thursday trading as weak
data from around the world led to a major sell-off. Investors
focused in on the report from Spain which revealed that about $70
billion would be needed for the country’s financial institutions
while American jobless claims, the Philly Fed survey, and
previously owned home sales all disappointed on the domestic
front.
Thanks to these data points, as well as the hangover from
yesterday’s Fed meeting, the Dow finished the day lower by about 2%
or 251 points, while the broader indexes fell by even more, with
the S&P 500 sinking by 2.2% and the Nasdaq tumbling by 2.4% in
the session.
It was hard to figure out the biggest losing sectors on the day
as selling was pretty much across the board. Although, basic
materials, tech, and financials did stand out on the downside while
consumer goods and health care did manage to lose less than most on
the session (read Medical Device ETFs: A Better Way To Play Health
Care?).
Given the risk off environment, the dollar and bonds were the
place to be for much of the session as the dollar index rose above
the $82.25 mark while the greenback added more than 1.6 cents
against the euro and 1.3 cents against the pound. Meanwhile, rates
fell across the board for T-bills, as the 10 year fell to 1.62%
while the 30 year breached the 2.7% mark to close out Thursday
trading.
Commodity trading was unsurprisingly the polar opposite of the
bond/dollar market as natural resources sank pretty much across the
board. Cotton led the softs lower with a 6.9% slump while crude oil
sank 3.9% while precious metals fell by similar levels as well.
For ETF trading, most products saw slightly more active days
across the board although Asia-Pacific ETFs and mid cap products
were trading far less on the day. On the other hand, commodities
were in focus while U.S. sector products continued to trade at
elevated amounts heading into the final day of trading this
week.
In particular, investors saw a great deal of interest in the oil
ETF market, led by the United States Oil Fund
(USO). This product usually trades about 7.7 million
shares a day but spiked to just over 18.3 million shares during
Thursday’s session (read Two Energy ETFs Holding Their Ground).
This bump in activity was also seen in a number of other oil
ETFs during the session, including the leveraged version of the
product as well. Clearly, investors were seeking to tap into these
types of funds on the steep slide in crude oil prices during the
session as USO fell by about 3.4% on the day.
In fact, USO is now within striking distance of its 52 week low
of $29.10/share and is now down 23% so far in 2012 suggesting a
bear market is well under way for the oil market.
Another segment which saw an outsized level of interest when
compared to normal conditions was in the large cap blend space,
especially in the case of the iShares S&P 100 Index
Fund (OEF). This product usually does about 870,000 shares
in volume but surged to just over 3.7 million shares during today’s
session (read Try Value Investing With These Large Cap ETFs).
Other large cap blend products also saw a big day in volume
while funds similar to OEF—and this iShares fund as well—saw large
block trades dominate their activity on the session. In fact, close
to two million shares in OEF’s volume was the result of two trades
while similar figures were present in other products in the
space.
Apparently, some big traders were making large moves in the
space but felt more comfortable using the comparatively small OEF
rather than SPY and some of the other more famous products in the
segment.
(see more on ETFs in the Zacks ETF Center)
ISHARS-SP100 (OEF): ETF Research Reports
US-OIL FUND LP (USO): ETF Research Reports
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