The dramatic sell-off in stocks on Tuesday took down all sectors, but financials clearly were the leaders to the downside. Around the globe, emerging markets in Asia were also the scene of aggressive selling in response to growing, short-term overbought conditions.
Here are 7 ETFs You Need to Know for Wednesday.
Financials, as measured by the Financial Select Sector SPDRS ETF ( XLF | Quote | Chart | News | PowerRating), were down more than 9% late in trading on Tuesday, as traders took profits in the wake of Treasury Secretary Tim Geithner's financial restructuring plan announcement. Conversely, the ProShares UltraShort Financials ETF ( SKF | Quote | Chart | News | PowerRating) was up by more than 17%.
More "selling the news" was to be found in technology, as the Technology Select Sector SPDRS ETF ( XLK | Quote | Chart | News | PowerRating) were down as much as 4% late in trading on Tuesday.
Bond ETFs, which had been increasingly oversold above the 200-day moving average, found eager buyers on Tuesday. One typical example, the iShares Barclay's 20+ Year Treasury Bond Fund ETF ( TLT | Quote | Chart | News | PowerRating), was up more than 2% late in the trading session.
Tuesday after the bell on CNBC's Fast Money, guest analyst and commodity trader Joe Terranova suggested a long agricultural commodity/short energy commodity trade as one way to take advantage of a potential change in leadership in the commodity area. One of the most widely traded agricultural commodity ETFs is the PowerShares DB Agriculture Fund ETF ( DBA | Quote | Chart | News | PowerRating). For the energy commodity fund, the United States Oil Fund ( USO | Quote | Chart | News | PowerRating) is one popular choice for ETF traders and investors, as is the PowerShares DB Energy Fund ETF ( DBE | Quote | Chart | News | PowerRating) which like USO includes natural gas, heating oil and gasoline along with crude oil.
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