Equity markets tumbled to finish the week, as disappointing economic data combined with a criminal investigation at Goldman Sachs to weigh heavily on the major indexes. This slump, which saw the Dow fall by more than 150 points, came after the Commerce Department announced lower than expected GDP numbers; the economy grew by 3.2% in the January-March period compared to a forecasted rate of 3.4%. Meanwhile, oil prices trended higher and finished the day just under $86/bbl. after the oil spill in the Gulf threatened to shut down some platforms and limit future offshore drilling operations.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, dropped 8.26 points, or 0.8%, as aggregate trading volume surged above 1 billion shares.
One of the biggest gainers on the day was iPath S&P 500 VIX Short-Term Futures ETN (VXX), which soared more than 8% as the Goldman news rocked markets. The Justice Department has started a criminal investigation against the bank over the mortgage deals it orchestrated. “They’re really going after Goldman pretty hard,” said Ryan Detrick, senior technical analyst at Schaeffer’s Investment Research. “That’s got people on edge.” Despite weakness this year, VXX is up more than 15% over the past week as investors have grown more skittish over the health of the economy in Europe and ongoing issues at banking giant Goldman Sachs (see more information on VXX’s returns here).
One of the biggest losers was the Vanguard REIT Index ETF (VNQ), which sank 3.1% in Friday trading. This slump came on the back of weaker than expected consumer sentiment numbers as well as broad market weakness. Additionally, a weak report out of Simon Property Group, the top holding in VNQ, weighed heavily on the fund and the overall retail sector. Simon reported a 93.3% decline in net income to 3 cents a share from 45 cents a share a year earlier. Simon which makes up 10.1% of VNQ saw its shares slide down more than 3.7% in Friday trading (see more of VNQ’s holdings here).
Disclosure: No positions at time of writing.