A week full of highly-anticipated events got off to a sluggish start Monday, as most major benchmarks finished little changed in light trading. Perhaps the biggest news of the day came from Moody’s, which released a report noting that the margin of error for the U.S. losing its AAA rating has “substantially diminished.” Elsewhere, President Obama took his campaign for health care overhaul on the road, while Senator Dodd unveiled a bill with potentially serious ramifications for big banks and Wall Street behemoths.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, lost 1.86 points, or 0.2%, to close at 1,044.44. The decline snapped a four-session winning streak for the index.
Commodities moved broadly lower to open the week as a strong dollar weighed on prices. The iPath Dow Jones-UBS Copper Total Return ETN (JJC) slid 2.3% on the day, moving it into negative territory for the year. In addition to the strong greenback, increased concerns that China, a major consumer of copper, will take steps to tighten monetary policy sent prices lower.
One of the day’s biggest winners was the PowerShares DB U.S. Dollar Index Bullish (UUP), which closed up 0.6% as safe havens gained appeal following Moody’s cryptic warning. The ratings agency announced that rising costs of servicing debt have moved the U.S. and U.K. closer to losing AAA credit ratings. Under the ratings company’s “baseline scenario,” the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013.
GLD, another popular safe haven investment, finished the day up 0.4%.
Disclosure: No positions at time of writing.