Key market index funds were mixed Tuesday, while Weibo (WB) and Sina‘s (SINA) quarterly results fueled emerging markets.
X SPDR Dow Jones Industrial Average (DIA) and SPDR S&P 500 (SPY) fell 0.3% and 0.2%, respectively, while PowerShares QQQ Trust (QQQ) edged 0.1% higher. Emerging markets outperformed in the stock market today with iShares MSCI Emerging Markets (EEM) up 0.5%, thanks largely to surging Chinese stocks.
KraneShares CSI China Internet (KWEB) leapt 2%, retaking its 50-day moving average. Shares found support at the 200-day moving average on Friday.
Energy, semiconductors and homebuilders led the downside among sector funds. Gold and metals miners and retail were among the few gainers. SPDR S&P Metals & Mining (XME) rose 1.5% to reclaim its 50-day moving average. It’s on track for a third straight advance.
VanEck Vectors Junior Gold Miners (GDXJ) rose 1%; SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) were each up about 0.5%.
Bitcoin slid 5% to $8,494.57, according to CoinDesk, after earlier rising close to the $9,000 level. Bitcoin Investment Trust (GBTC) fell 4% to halt a five-session win streak.
AI In Play?
Volatility in the stock market may rattle nerves, but it may also offer a chance to gain access to hot AI plays such as Microsoft (MSFT), Adobe Systems (ADBE) and Salesforce.com (CRM).
Case in point: iShares North American Tech-Software (IGV) is finding support at its 50-day moving average line.
When the broader market is in a confirmed uptrend, a bounce off the line would mark a buy opportunity. But with the broader market still in a correction, all buys are riskier than usual. The ETF advanced 10% from a prior rebound off the 50-day in early January to its Jan. 29 intraday high. It was featured in this ETF column on Dec. 28.
The $1.1 billion fund, which will mark its 17th anniversary in July, tracks the S&P North American Technology Software Index. Its biggest country weighting as of Feb. 9 was the U.S., at 98% of assets. Canada made up the rest. Application software accounted for about 51% of its sector weight, systems software 35%, and home entertainment software 14%.
IGV’s top five holdings were Adobe Systems (ADBE), Microsoft, Salesforce.com, Oracle (ORCL) and Activision Blizzard (ATVI). The top five, which represented 41% of the 61-stock portfolio, have outperformed the broader market this year. Adobe, Activision and Salesforce.com have advanced 10%, 8% and 6%, respectively.
The ETF has returned nearly 3% year-to-date through Feb. 9, vs. a 1% loss for the S&P 500. IGV’s average annual returns of 20.3%, 19.3% and 13.6% over the past three, five and 10 years also beat the S&P 500’s 10.8%, 13.8% and 9.3% gains for the same periods. IGV carries a 0.48% expense ratio.
IBD’S TAKE: Making money catching ETF uptrends requires knowledge about how to read charts. You can learn how at IBD University.
Monday’s picks, First Trust NYSE Arca Biotechnology Index (FBT) and SPDR S&P Biotech (XBI), extended their gains after finding support at their 50-day lines on Friday.
Apple, Boeing Soar As Market Rallies; Bitcoin Ignores Warning
Nvidia, Top Tech Stocks Lead As S&P Bounces Off Key Support Line
Why The Stock Market Sold Off, And What You Should Do Now