Daily ETF Roundup: EWZ Gains On Real Strength, VXX Falters On Market Win

by on October 24, 2011 | ETFs Mentioned:

Monday marked the second straight major winning day for equities, as a number of earnings reports and good news from overseas propelled markets forward. “Five shares rose for every one that fell on the New York Stock Exchange” write Stan Choe and David K. Randall. The S&P 500 posted gains of 1.3% while the NASDAQ beat that figure by 100 basis points. Though major indexes fared well, oil was the big winner on the day, as crude jumped nearly 5% to finish well above $91 per barrel. The death of Moammar Gadhafi and the possibility of getting Libya’s oil production back on track has big oil chomping at the bit and is sending WTI surging. Finally, gold posted a nice 1% gain as the metal settled in around $1,650/oz [see also ETF Insider: Bulls In Drivers Seat].

It was a busy day in the U.S. corporate world, as a wealth of M&A activity surrounded companies like Google, Yahoo!, J.M. Smucker, and Mattel. Perhaps the biggest news came from Google, who is reportedly interested in helping to finance the takeover of Yahoo! by another firm. Yahoo! has been flailing for some time as the once dominant internet giant gave its CEO the boot just a few weeks ago. Major earnings reports came from firms like Caterpillar who reported a stronger than expected quarter and sent shares soaring 5%. On the other side of things, Netflix disappointed despite growing profits, as their shares were down an astonishing 27.6% in after-hours trading [see also Futures Free Commodity Portfolio Now Available].

One of the biggest ETF winners on the day came from the MSCI Brazil Index Fund (EWZ), which finished the day up 4%. The fund coasted along with the appreciation of the real, as Brazil’s economy took signs from European optimism to heart. Analysts also revised Brazil’s inflation outlook down for the future, with total inflation falling to 6.5% by the end of this year and dropping to around 5.6% by the end of 2012. Today’s strong performance brings EWZ to the still painful -24% on the year, though these losses are boosted by a current dividend yield of 4.55%.

One of the biggest ETF losers from today’s winning streak was the S&P 500 VIX Short-Term Futures ETN (VXX). This volatility product has grown quite accustomed to massive daily swings, as it tracks first and second month VIX futures. Market strength brought VXX down nearly 6% on the day, as strong earnings and good news from Europe helped boost equities to some of the highest levels seen since the August debt debacle. The biggest boost come from reports that the European bailout may be bigger than originally expected, prompting a buying trend from investors all around the world, pushing VXX down into the dirt [see also Forget BRIC ETFs: Look To VISTA Nations For Better Opportunities].

Disclosure: No positions at time of writing.