Equity markets sank across the board on Wednesday, as weakness in the tech sector helped to push stocks down in early trading and major indexes weren’t able to fully recover. The Dow and S&P 500 finished the day lower by 0.7% and 0.4%, respectively, while the tech-heavy Nasdaq tumbled by 0.9% after market bellwether Cisco disappointed investors with its forecast. Meanwhile, commodity markets finished mixed as gold managed to gain back some of its losses and finish the day ahead by $9/oz., while oil finished the day flat. However, markets managed to sink a few of the soft commodities as coffee tumbled by 2.5% and sugar plummeted by 9.6% as a stronger dollar and easing supply concerns weighed on the markets.
While commodities have been in focus as of late, the real story today was DJIA component Cisco Systems (CSCO), which fell off a cliff and sank by more than 16% on the day. This incredible loss, which was the worst for the company in more than 16 years, came after the tech giant said it would miss Wall Street’s quarterly growth expectations for the next quarter. Cisco cited weakness in the cable market and in U.S. government spending which the company felt would push its growth rate down to between 3%-5%–a far cry from original predictions of 13% growth. This news had a ripple-effect in the technology sector sending a host of names tumbling on the day. Hewlett-Packard was off by 2.4% while Dell sank by 3.9%, helping to crush any hopes of a budding tech stock recovery heading into the end of the year.
The ETFdb 60 Index dipped 3.81 points, or 0.3%, as losers outnumbered winners by nearly three-to-one.
One of the biggest gainers on the day was the iPath DJ-UBS Copper ETN (JJC), which jumped higher by 1.5%. Today’s modest gains in prices came after China, the top consumer of the metal, released data showing that industrial output was stable despite the best efforts by Beijing to cool-off the red hot Chinese economy. These hopes for steady demand were boosted by a report from top copper producer Chile, where union miners walked off the job late last week at one of the world’s largest copper mines. Without the mine, which produces about 10% of the country’s total output of the metal, the global copper balance could swing from a surplus to a deficit, pushing prices even higher [see more on JJC's fact sheet].
One of the biggest losers in the ETFdb 60 was once again the United States Natural Gas Fund (UNG), which fell by 3.1% in Thursday trading. The fund continued its downward trend after yesterday’s EIA report showed that supplies of the heating and cooling fuel were at an all-time record. The organization also forecast that U.S. gas output this year will rise to the highest level in 37 years, a fact which could further add to already robust supply levels. Today’s losses help to reverse the recent uptick in fortunes for UNG which is now up 7.3% over the past two weeks. Instead, it helps to push UNG back on its downward trend which it has been on for all of 2010; the fund has lost 43.8% so far year-to-date [see more on UNG's technical analysis page].
Disclosure: No positions at time of writing.