ETF Trading Report: Total Market, Oil ETFs In Focus - ETF News And Commentary

Zacks Investment Research
Posted: May 07, 2012 5:03 PM
ETF Trading Report: Total Market, Oil ETFs In Focus - ETF News And Commentary

European events were in focus during Monday’s trading session as voters swung to the left in France and went to both extremes in the case of Greece. As a result, worries over the future of austerity programs across the continent were high, leaving the next step in the crisis uncertain to say the least.

Thanks to this risk, stocks sold off in some markets to start the week although U.S. exchanges were mostly mixed in Monday trading. The Nasdaq and the S&P 500 both managed to squeak by with gains while the Dow finished the day lower by 0.2%.

In terms of sectors, financials largely finished the day in the green while tech was more mixed as software companies led the segment lower in Monday trading. Basic materials also had a rough day, although most of the big oil was spared and the losses were concentrated in the independent and refiner segments.

Currency markets started the day strongly in the dollar’s favor, although the greenback lost most of its gains heading into the end of the day. A similar situation happened in the Treasury market as yields sank to start the day and then gained all of their lost momentum to finish Monday more or less at breakeven (see Greek ETF Plunges On Election Results).

In commodity trading, investors saw mixed-to-negative sentiment permeate the markets as precious metals slipped along with crude oil. In terms of gainers, Natural gas was again a big winner while copper and sugar both added about 1% on the day as well.

ETF trading was also mixed as many products saw volumes that were in-line with their historical averages. However, investors did again see more interest in European trading, as well as oil, financials, and global ETF segments as well.

In particular, investors saw a nice increase in volume for the PowerShares DB Oil Fund (DBO). This ETF usually sees volume of about 460,000 shares but experienced a spike to just over 3.0 million shares in today’s session (read Van Eck Files For Saudi Arabia ETFs).

This bump came as the rest of the oil ETF sector also saw large increases in volume on the day so this wasn’t too much of a surprise, although the rest of the space couldn’t match the move that DBO saw. Additionally, investors should note that a large majority of the trading came in the early part of the day; a 144,000 share block to open trading, and then close to 450,000 shares over the course of the 12:20pm-12:25pm period.

For these investors, this turned out to be a decent move, as the product rebounded into the close of Monday trading. However, it is worth noting that this popular oil ETF still finished the session lower by about 0.6% from where it started the week.

Another ETF that experienced a truly massive move in volume was the SPDR DJ Wilshire Total Market ETF (TMW). Usually, the product sees volume of about 6,500 shares but saw a whopping 2.5 million shares change hands in today’s session (read Ten Biggest U.S. Equity Market ETFs).

The reason for this massive increase in interest are unclear as similar total market funds either saw volumes that were in-line with averages or even were slightly below what has usually been seen. Additionally, it appears as though an impressive 2.5 million share block at 9:38 am was the bulk of the volume, as the product then traded just a few hundred shares throughout the rest of the session.

Apparently, a very large investor was enamored with TMW’s style and made it their preferred choice for investing in the entire U.S. market during Monday’s trading session.

(see more in the Zacks ETF Center)

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