Friday was an action-packed day on Wall Street and around the world, with a disappointing GDP release in London, reports of a divided Federal Reserve, and a continued climb in commodity prices. The Dow fell more than 100 points to finish the week below the 10,000 mark, a level it has now crossed several times in recent weeks. The ETFdb 60 Index, a more broad-based benchmark of investable assets, fell 9.71 points (0.9%) to finish the week at 1,014.20. The benchmark is still up 1.4% for the month of October.
Only eight components of the ETFdb 60 finished up Friday, led by the iPath S&P 500 VIX Short-Term Futures ETN (VXX), which was up about 0.6%. The VIX Index, a barometer of the anticipated volatility in the S&P 500, has fallen sharply in recent weeks as investors have become hopeful of more stable markets and fewer triple-digit swings in the Dow. Friday’s news that the Federal Reserve is divided on whether or not to signal a rate increase reminded investors of the fragile state of a still young recovery and the potential for major market-moving events in coming months. The Mid-Term VIX Futures ETN (VXZ), which tracks an index composed of longer dated futures on the VIX, rose more than 2%.
The iShares Dow Jones Transportation Average Index Fund (IYT) dropped 3.5% on a deteriorating outlook for the railroad sector. Burlington Northern Santa Fe, IYT’s largest individual holding, reported third quarter earnings sharply lower than the same period in the previous year. Union Pacific, another major IYT holding, also saw its shares slide after reporting earnings on Friday.
Disclosure: No positions at time of writing.