Equity markets see-sawed between gains and loses for most of the day, but a late surge in the last hour of trading left shares marginally higher to end Wednesday trading for the Dow; the S&P 500 finished lower by 0.1%. Technology and financials sectors were boosted by solid earnings reports out of Apple and Morgan Stanley; Apple was up more than 6% in today’s trading while Morgan Stanley saw its shares rise by close to 4.4% (see more on Apple’s earnings report). However, health care names were down sharply after Abbott Labs gave poor guidance for the rest of 2010; shares slumped more than 2.4%. “Abbott Labs’ 2010 forecast disappointed investors, and this helped pull down Merck as well,” said analysts at Action Economics. Merck tumbled, posting a 3.75% loss on the day.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through exchange-traded products, added 1.03 points, or 0.1%, to reach a new 2010 high of 1,070.17.
One of the biggest winners on the day was the iPath S&P 500 VIX Short-Term Futures ETN (VXX), which soared by 1.8%. VXX was higher after the markets rocked back and forth between gains and losses throughout an active trading day, causing some anxiety. The S&P 500 started the day in the black, and then sunk around noon, only to slump back down around 2 pm and then rise to finish the day roughly back where it started. This roller coaster ride may not have meant much to longer term investors but the increase in volatility was good news for investors in VXX (see other charts on VXX).
One of the biggest losers on the day was Health Care Select Sector SPDR (XLV) which fell by 1.8%. Health care shares tumbled after a disappointing outlook from Abbott Labs, which sank despite beating earnings estimates. The company cut its profit forecast from $4.20-$4.25 a share down to $4.13-$4.18 due to the impact of health care reform, specifically citing higher rebates the company must now provide to Medicaid patients under the new law. Abbott makes up 5.4% of XLV; see all the holdings of XLV here.
Disclosure: No positions at time of writing.