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Energy and Mining SPDRs Rally as Services Sector Declines

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Major indexes correct prior to non-farm payroll release

US Markets opened on a lower note on March 3, 2016, after rallying in previous sessions. Investors turned cautious prior to the release of non-farm payroll numbers. The S&P 500 Futures Index fell 0.27%, and the NASDAQ Futures and Dow Jones Industrial Average fell by 0.39% and 0.31%, respectively. The US Dollar Index, which measures the strength of the US dollar against other major currencies, was trading lower by 0.56% at 12:00 PM EST.

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Services PMI falls in February

The Services PMI (Purchasing Managers’ Index) published by Markit measures the strength of the services sector in the United States. In February, it released in the contraction territory at 49.7, slightly below estimated forecasts and the previous month’s figure of 53.2.

The shrinkage in services activity was the first since October 2013. Growth in new business volumes was the slowest since January 2015. A release above the threshold level of 50 indicates expansion in the sector, while a reading below 50 points indicates contraction.

Impact on ETFs across sector SPDRs

The metals and mining and oil production sectors took positive cues as commodity prices continued the rally on March 3, 2016. Looking at sector-specific SPDRs, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) was the outperformer among major sector-specific ETFs. XOP rose by 3.5% on March 3, 2016, at 12:00 PM EST.

The SPDR S&P Metals and Mining ETF (XME) and the SPDR Gold Shares (GLD) were also trading higher by 2.6% and 1.3%, respectively. Among the major sector-specific SPDRs trading on a negative note, the SPDR S&P Biotech ETF (XBI) fell by 1.6%. The Health Care Select Sector SPDR ETF (XLV) and the Technology Select Sector SPDR ETF (XLK) fell by 1.1% and 0.70%, respectively.

Next, let’s look at the Latin American Markets in a shrinking Brazilian economy.

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