Earnings season shifted into high gear on Wednesday, with BofA and Wells Fargo posting impressive results to lift the banking sector. Starbucks reported that its fiscal first quarter profits nearly quadrupled and raised the full year outlook. But most equity benchmarks posted big losses on the day amidst anxiety about potential interest rate hikes. Elsewhere, Obama indicated that health care overhaul may be scaled back to “core elements” while Warren Buffett expressed his dissatisfaction with Kraft’s bid for Cadbury.
The ETFdb 60 Index posted its biggest single session decline of the year, losing 12.27 points, or 1.2%, to close at 1,041.72. The day’s sharp drop erased more than half of 2010′s gains, as the index is now up 0.7% on the year. For updates on the day’s biggest winners and losers, sign up for our free ETF newsletter.
Leading the way lower was the Market Vectors Gold Miners ETF (GDX), which lost more than 4% to cross into negative territory for the year. Gold bullion prices plummeted on Wednesday as the dollar showed strength against almost all of its major rivals. A strong greenback diminishes the safe haven appeal of gold bullion, as well as the prospects of those companies engaged in mining of the precious metal.
The PowerShares DB US Dollar Index Bullish (UUP) was one of the few bright spots on the day, adding more than 1.2% as the dollar surged to a four-month high versus the euro. Ongoing concerns over the Greek financial system and concerns that the Chinese government could act to tighten credit conditions boosted the greenback. UUP replicates a long position in the dollar relative to a basket of developed market currencies, with significant weight against the euro (see this feature for a look under the hood of this product).
Disclosure: No positions at time of writing.