After sinking to start the day, U.S. equity markets fought their way back to a near breakeven level in midday trading only to fall sharply in the last 90 minutes and finish Thursday modestly lower. The Nasdaq was relatively unscathed, losing just 0.3%, while the Dow and S&P 500 suffered more significant losses of 0.7% and 0.8%, respectively. Commodity markets finished relatively flat as gold maintained its price above the $1,290/oz. mark and silver stayed above the $21 level. Bond and currency markets were also relatively flat with the biggest movers coming out of the short-term Treasury market, which saw yields slip to the 0.42% mark.
Today’s losses were spurred by rising jobless claims, which showed that the number of people seeking first time unemployment benefits rose to 465,000, a sharp increase from last month’s 450,000 and well ahead of the 453,000 claims which were expected. This news helped to draw many investors away from positive news in the housing market showing that home sales rebounded 7.6% in August and good news from the Conference Board reporting that its index of leading economic indicators surged higher by 0.3%. Nevertheless, investor confidence remains weak due to low to non-existent levels of job growth and expectations of a sluggish economy for the foreseeable future.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through exchange-traded funds, sank 5.24 points, or 0.5%.
One of the biggest winners on the day was the United States Natural Gas Fund (UNG), which jumped higher by 1.1%. These gains came as a result of increased electrical usage which kept supplies lower than initially predicted, and concern over a storm brewing in the southern Caribbean. Warm fall weather helped to boost electricity production 3.1% from 2009 levels as demand for air conditioning soared thanks to unseasonably warm temperatures across much of the country. Meanwhile, there is growing speculation that the storm in the Caribbean will soon become a tropical depression and strike the vital gas production region of the Gulf, potentially boosting prices in the near-term [read more about the events that moved UNG today in our Thursday ETF To Watch].
One of the biggest losers in the ETFdb 60 was the Vanguard Real Estate ETF (VNQ), which fell by 2.5% in Thursday trading. There was severe weakness in the broad REIT market with all ten of the fund’s top ten holdings slipping by more than 2.3% during today’s session. The heaviest losses among the fund’s top ten holdings came from AvalonBay Communities and Public Storage, which combine to make up roughly 8% of the fund’s total assets. These losses heavily contribute to VNQ’s recent spat of weak performance; the fund is now down 3.1% over the past week [see more fundamentals of VNQ here].
Disclosure: No positions at time of writing.