Equity markets endured another volatile day on Tuesday, as major indexes plunged to start the trading day after rocky sessions in Europe and Asia. At one point, the Dow flirted with the 9,800 mark before surging steadily throughout the day to finish at 10,043, just 22.8 points off of its open. Although the Dow and the Nasdaq finished down for the day, the broad S&P 500 managed to inch out a gain, finishing the day ahead by less than half a point. Commodity markets saw crude continue its slide as oil finished the day under $70/bbl while investors continued to pile into Treasuries (see What Oil ETFs Are Telling Us About Crude Prices). The ten-year note touched 3.07%, the lowest yield in 13 months.
The ETFdb 60 Index slid another 1.9 points, or 0.2%, to close at 996.94. The benchmark is now down 3.6% on the year.
One of the main winners in the ETFdb 60 was the Market Vectors Gold Miners Fund (GDX), which soared by 2.7% on the day. The gain can largely be attributed to rising geopolitical tensions on the Korean peninsula as well as continued fears over the sovereign debt crisis in Europe. North Korea’s Kim Jong-il has reportedly ordered the North Korean security agencies and the all-civilian People’s Army to “be ready for combat.” This news sent gold further higher as investors fled to the safe-haven after the metal saw a sell-off last week. Tensions on “the Korean peninsula also have to be viewed with increasing alarm given how unpredictable and paranoid the North Koreans can be,” wrote MF Global analysts in a report to clients (see more on GDX’s fundamentals).
One of the biggest losers on the day was iPath S&P 500 VIX Short-Term Futures ETN (VXX), which sank by 4.4% in Tuesday trading. Despite the large drop in equity markets in morning trading, VXX tumbled as investors gained confidence and pushed the S&P 500 into the black for the day. Although VXX suffered steep losses today, the fund is still up close to 70% over the past month as investor confidence crumbled over worries in Europe (see more charts of VXX here).
Disclosure: No positions at time of writing.