April Webinar RegistrationApril Webinar Registration


Stocks Pare Gains As Apple Tests Support Again And Bitcoin Drops

Key stock market index funds sharply pared their advance Monday into the close after rising nearly 2% intraday.

X

Apple (AAPL), Intel (INTC) and other big-cap techs held solid gains though the Dow Jones industrial average lagged the other indexes.

PowerShares QQQ Trust (QQQ) rose 0.7%, SPDR S&P 500 (SPY) added 0.5% and SPDR Dow Jones Industrial Average (DIA) climbed 0.3% in the stock market today.

Merck (MRK) led the Dow with a 5% pop, followed by Intel, which advanced 2%. IBM (IBM), Cisco (CSCO) and Apple each gained 1% or more. Apple fell back to its 50-day moving average after surging past the line earlier in the session. It's been running into resistance near the 50-day for almost the past three weeks. The iPhone maker announced red versions of its iPhone 8 and 8 Plus will be available for preorder on Tuesday and on sale Friday.

Biotech, telecom and semiconductor were the biggest advancers among sector funds. VanEck Vectors Semiconductor (SMH) rose 0.7%, iShares Nasdaq Biotechnology (IBB)rallied 1.8% and Technology Select Sector SPDR (XLK) gained 0.7%.

Homebuilding, bank and retail ETFs were underwater. Gold miners slipped back into the red, with VanEck Vectors Gold Miners (GDX) and VanEck Vectors Junior Gold Miners (GDXJ) down 0.4% and 0.2%, respectively. But gold commodity ETFs rose along with gold futures, which added 0.3% to $1,340.10 an ounce.

Bitcoin shed 6% to $6,628.91, according to CoinDesk, after climbing back above $7,000 early in the session. Bitcoin Investment Trust (GBTC) was flat after giving up an earlier gain. It's 29% below its 50-day line and 72% off its December peak.

Like Big Dividends?

Many of the biggest dividend paying exchange traded products (ETPs) focus on the real estate and energy sectors. Why?

Real estate investment trusts (REITs), for instance, must pass along at least 90% of their income to shareholders in exchange for lower tax rates than regular corporations. That translates into often hefty dividend payouts.

Master limited partnerships (MLPs), which dominate the funds in the accompanying chart, have a similar structure. They also pass the lion's share of their cash flow through to investors as payouts. Since that cash flow doesn't get booked as income, MLPs get a tax break.

 

 

InfraCap MLP (AMZA) topped the list with a whopping 33.6% annualized yield, according to Morningstar Direct. The $557.5 million fund's top five holdings as of April 6 were Energy Transfer Partners (ETP), MPLX (MPLX), Williams Partners (WPZ), Andeavor Logistics (ANDX) and Buckeye Partners (BPL). They made up nearly 56% of the 36-stock portfolio. AMZA is trading near two-year lows and is 25% off its 52-week high. It carries a 1.93% expense ratio.

PowerShares Global Listed Private Equity Portfolio (PSP) was next with a 12.1% yield. The $241.4 million fund tracks the Red Rocks Global Listed Private Equity Index, which invests in private equity firms including business development companies and MLPs. PSP is 11% off its 52-week high and bears a 2.3% expense ratio.

IShares Mortgage Real Estate Capped (REM) placed third with a 10.2% annualized dividend. The $1 billion fund tracks the FTSE NAREIT All Mortgage Capped Index, composed of U.S. REITs. Its top five holdings, which accounted for 48% of assets, included Annaly Capital Management (NLY), AGNC Investment (AGNC) and Starwood Property Trust (STWD). REM is 12% off its 52-week high. Its expense ratio is 0.48%.

Two more broadly diversified ETPs on the list, Global X SuperDividend (SDIV) and Global X SuperDividend US (DIV), offer respective yields of 7.1% and 6.2%. Morningstar categorizes them as international equity and U.S. equity, in that order. SDIV is 8% off its high and carries a 0.58% expense ratio; DIV is 7% below its high and sports a 0.45% ratio. Both are close to retaking their 50-day moving average lines.

Friday's pick, iShares MSCI KLD 400 Social (DSI), fell to 4% below its 50-day line and was testing its 200-day line again.

YOU MAY ALSO BE INTERESTED IN:

Dow Leads Broad Stock Selloff; Will Apple Lose Support Again?

Will The Escalating U.S.-China Trade War Hurt Your Stock Funds?

Frontier Markets Emerge As An Option While Major Indexes Flounder