Financial markets continued their freefall the day after president Obama’s first State of the Union Address, despite some pleasant earnings surprises. Ford reported its first annual profit since 2005, and indicated that the company would remain profitable on a pre-tax basis for the next two years. Microsoft reported a big jump in sales attributable partly to strong demand for Windows 7, while Amazon’s revenue and net income rose 42% and 71%, respectively, in the fourth quarter. Elsewhere, the Senate voted to reappoint Ben Bernanke to a second term as the Chairman of the Federal Reserve, an outcome that seemed in doubt as recently as last week.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, lost 8.04 points, or 0.8%, to close at 1,006.92. The index is now down 2.6% in January and has lost ground in six of the last seven sessions.
For the second consecutive day, the iPath Dow Jones-UBS Copper Total Return ETN (JJC) was the benchmark’s biggest loser, dropping almost 3% on an unexpected drop in new home sales and worries that interest rates could climb sooner than previously thought. An increase in U.S. rates would boost the dollar and drain some of the cheap money that has sent copper surging in the last year. A rate increase in China, now seen as very likely by many analysts, could also reduce demand from the world’s largest consumer of copper.
One of the few ETFs to finish Thursday in the black was the PowerShares DB Agriculture Fund (DBA), which added 0.8% as corn, soybeans, and oats all inched higher.
Disclosure: No positions at time of writing.