After staying rangebound for much of the trading day, equity markets surged higher in the final hour of trading to finish the holiday-shortened week sharply in the green. The Dow and S&P 500 jumped higher by 0.6% and 0.7% respectively while the Nasdaq was up by close to 1% on the day. In commodity markets, oil continued its surge higher as the important commodity added 1% on the day to finish above $76/bbl. while gold rebounded above the $1,200/oz mark after jumping close to $14/oz. in Friday trading. This ends another choppy week of trading for the markets which made back most of the losses that they suffered in the previous week. “It’s time to determine if this is just a soft patch in the recovery or if it’s the beginning of a second leg down. That’s what the market is struggling with,” said Dan Deming, a trader with Stutland Equities in Chicago.
One of the biggest gainers on the day was the Market Vectors TR Gold Miners Fund (GDX) which soared by 2.3%. This spike came after gold dipped below the critical $1,200/oz. barrier which prompted bargain buying from investors around the world who were anxious to buy the metal off of its highs which were at the $1,260 mark. Some investors are also cautious in regards to the upcoming bank stress tests being performed in Europe next week which helped create some safe haven buying in the final hour of trading [see more charts of GDX here].
One of the biggest losers was the iPath S&P 500 VIX Short-Term Futures ETN (VXX) which fell by 2.6% on the day. This drop came after continued broad strength in the markets ahead of the start of earnings season on Monday. After some early choppiness, the S&P 500 stabilized for much of the trading day before surging in the final 90 minutes of trading by close to half a percent. This abrupt spike helped to sink VXX which is now down 17.3% over the past week and 25% year to date [see more fundamentals of VXX].
Disclosure: No positions at time of writing