Daily ETF Roundup: VGK Surges On Short-Selling Ban, GLD Dips On Market Rebound

by on August 12, 2011 | Updated August 15, 2011 | ETFs Mentioned:

Today saw a stable end to a week that was anything but. Despite massive losses on Monday and Wednesday, stocks finished down only 1% on the week. But with a week that exhibited so much volatility, many are anxious to see what the future will hold, as analysts across the board have different theories about bear and bull runs on the horizon. Major losses this week were brought on by the S&P downgrade, the Fed’s decision to hold rates for two years, and speculation that the France will soon be downgraded. On the flipside, strong retail spending and jobless claims led to gains on separate trading sessions. Oil was one of the hardest hit assets, as the price of a barrel fell down below $80 at one point, finishing the week out around the $85 mark [see also Six ETFs Up 45% Or More During The Recent Crisis].

Despite markets pulling out of their nosedive in the latter half of the week, major indexes posted their “worst three-week decline since March 2009 when they hit 12-year lows,” writes Rodrigo Campos. Luckily, Friday saw low volume and less volatile swings in comparison with the rest of the week, suggesting investors have calmed down a bit and some anxieties have been alleviated. Friday marked the first two day rally on the S&P since July 21; quite the drought for one of the world’s top benchmarks.

One of the biggest ETF winners on the day was the European ETF (VGK). This fund is made up of a slew of European nations like the UK, France, Switzerland, Germany and many others. From a holdings standpoint, VGK features a laundry list of bellwethers like Nestle, Vodafone, and Royal Dutch Shell, giving it high weightings in giant and large cap firms. It should come as no surprise to see this fund down 8.5% on the year, as Europe has struggled with the euro and numerous debt crises. Today, the fund shot up 1.8% on news that short-selling of financials has been banned in France, Italy, Spain, and Belgium, easing investor fears of harsh market declines. While markets in Europe jumped on the day, investors should keep in mind that this was tried in the U.K. in 2008, but the index ended up losing over 20% in the following month [see also Eric Dutram Discusses ETFs And The European Debt Crisis On BNN].

One of the biggest ETF losers on the day was the SPDR Gold Trust (GLD), which has been on a tear as of late. Gold quickly shot past $1,700 per ounce over the last few days to even break through the $1,800 mark intraday on Wednesday. But now that equities seemed to have found their footing, gold has begun to retreat, as investors leave their safe haven positions and brave equity waters yet again. As always, analysts have bold predictions for where gold is going in the future, but nobody could have predicted the last eight or nine sessions that gold has tracked, as the metal has yet again hit historic highs on the week. GLD dropped 0.5% on the day [see also Three Defensive ETFs For The S&P Downgrade].

Disclosure: No positions at time of writing.