Yet another test of the global economic recovery got underway on Monday as earnings season began to ramp up. Alcoa reported a first quarter loss of $201 million after the bell, disappointing investors who had been expecting a profit. During Monday trading a jump in shares of the aluminum maker pushed the Dow above the 11,000 mark. The VIX settled at its lowest level since July 2007, while the dollar rose against the yen but slipped against the euro. Gold prices hit a new 2010 high while crude oil’s losing streak reached four days.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, added 0.20 points on the day, despite the fact that winners outnumbered losers by more than two-to-one. Volume was light at less than 500 million shares.
The Vanguard European ETF (VGK) was among the day’s biggest winners, heading higher on a generally positive market reaction to a $40 billion bailout plan. The bailout plan was attacked by taxpayer groups in Germany, which would shoulder a significant portion of the package. Greece hasn’t yet looked to tap bailout funding, which some have speculated is merely a contingency plan. But other reports suggest that the emergency cash could be tapped within weeks. The market’s take on Greece’s plan to slash its budget will be tested several times in coming weeks. On Tuesday, the government will seek to generate €1.2 billion from the sale of short-term Treasuries. Later in April, Greek officials will test interest in a dollar-denominated bond issue valued at up to $10 billion.
The iPath Dow Jones-UBS Copper ETN (JJC) lost ground to start the week as copper prices pulled back in Monday trading. Concerns that the recent rally was exaggerated weighed on prices, after prices reached their highest level since July 2008 on bets that the economic recovery will continue to gather strength.
Disclosure: No positions at time of writing.