In what was a complete reversal from our previous three trading sessions, today’s markets saw a pullback as less-than-encouraging data rained in from overseas. Overall, the Dow dipped 76 points while the S&P 500 lost approximately 1%. Meanwhile, oil too saw a reversal from yesterday’s strong gains, as the price of crude dipped to around $87 per barrel. The rough day comes from bad news in Europe, despite the fact that Fitch upheld the U.S. AAA credit rating, which many thought would have kept markets about their winning ways on the day [see also ETF Insider: Beware Of A Dead Cat Bounce].
The greenback saw modest gains along while a number of precious metals that all soared based on global economic uncertainty. While the euro was slightly down on the day, the Swiss franc took yet another big hit, as the Swiss National Bank has recently taken steps to curtail the strength of its currency; exports have become increasingly expensive in Switzerland, putting a damper on the economy. Other notable commodity losses came from natural gas, which lost approximately 2.2% in Tuesday’s session.
One of the biggest ETF winners of the day was the SPDR Gold Trust (GLD). Gold has been in the headlines for the majority of 2011 as it seems to be breaking price records on a weekly basis. While the precious metal suffered in yesterday’s strong trading session, today reclaimed those losses and then some, as investors sought after their favorite safe haven amid uncertainty from the euro zone. The popular fund, which is close to surpassing SPY in total assets, exchanged hands over 19.5 million times today as it posted strong gains of 1.2% [see also Gold SPDR Close To Overtaking SPY As Largest ETF In The World].
One of the biggest ETF losers on the day came from European ETF (VGK), which has been under the microscope as the euro zone deals with yet another financial crisis. Today the hits came from an unexpected corner, as Germany, the diamond in the rough as far as Europe is concerned, reported slower than expected GDP growth. The Q2 reading, which came in at a measly 0.1%, “compared with a Reuters consensus forecast for a 0.5 percent expansion, was the weakest since the first quarter of 2009, when Germany was at the end of its worst recession since World War II,” write Brian Rohan and Sarah Marsh. As Europe’s top economy, a foggy outlook from this powerhouse nation puts a major anchor on the entire continent, striking fear into investors across the world. VGK sank 1.9% on the day [see also Eric Dutram Discusses ETFs And The European Debt Crisis On BNN].