Utilities on the rise, betraying confidence of strengthening U.S. economy


Investors plowed $1.2B into U.S. utilities sector ETFs during the past five days, signaling skepticism that an economic recovery is strong enough to eventually lift interest rates.

Military conquests in Iraq by Islamic insurgents over the past week probably fueled the trend, and the Fed said today that interest rates will stay low for a considerable period even amid economic growth after it stops buying back bonds; utility stocks responded, with the S&P 500 Utilities Index jumping 2.2% in its biggest one-day gain since last September.

The FXG and FXU ETFs enjoyed record cash inflows June 16, according to data compiled by Bloomberg; State Street’s Utilities Select Sector SPDR (XLU) was the best-performing sector ETF in the past week, attracting $468M.

ETFs: IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP

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