Daily ETF Roundup: IYT Sinks, GLD Rallies Again

by on June 22, 2010 | ETFs Mentioned:

The enthusiasm over China’s new currency policy that market the beginning of the trading week faded quickly, with most major benchmarks finishing Tuesday sharply lower. Uncertainty over the energy sector continued to weigh on markets late in the day, after a federal judge in New Orleans blocked a six-month moratorium on new deepwater drilling projects. The White House vowed to appeal the ruling, setting the stage for another round of confrontations between Washington and Big Oil. Elsewhere, president Obama lost one of the most visible members of his economic team, while Apple reported that it had sold more than three million iPads since the gadget debuted less than three months ago.

The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, slid 9.10 points, or 0.9%. Most equity components plunged lower on the day while fixed income components finished higher; losers outnumbered winners by nearly three-to-one on the day.

The biggest loser was the iShares Dow Jones Transportation Index Fund (IYT), which headed lower by 3.8%. IYT’s big loss came as railroad stocks tumbled off of recent highs. IYT’s largest holdings include FedEx Corporation (FDX), as well as Union Pacific, Norfolk Southern, and CSX Corporation.

One of the few ETF winners on Tuesday was the SPDR Gold Trust (GLD), which added 0.9% on the day. Spot gold prices inched up amidst lingering economic uncertainty. Gold prices had initially jumped following the announcement by Chinese officials of the end to the yuan’s peg to the dollar, but reversed gains as investors sought out riskier assets. On Tuesday, fresh risk aversion popped up, sending investors racing back to safe havens (see Five Safe Haven ETFs). Separately, the World Gold Council more than doubled its estimate for the amount of gold held by Saudi Arabia’s central bank.

Disclosure: No positions at time of writing.