Daily ETF Roundup: Congress Spooks Markets Ahead of Holidays

by on December 21, 2012 | ETFs Mentioned:

Markets took a steep tumble today, as investors left for the weekend feeling uneasy about the budget talks in Washington. After several back and forth talks between the President, House Speaker John Boehner, in a surprise move, abandoned his plans to bring his “Plan B” budget proposal to a vote, though he assured the public that he hasn’t given up on negotiations with the President. And with Congress disbanded until after Christmas, Washington now has even fewer days to concoct some plan to avoid the economy tipping into a recession [see also 101 High Yielding ETFs For Every Dividend Investor].

Global Market Overview: Congress Spooks Markets Ahead of Holidays

All three major U.S. equity indexes tumbled into negative territory today following a gloomy day in budget talks in Washington. Tech-heavy Nasdaq (QQQ) came at the bottom of the barrel, shedding 0.96% duing the session. The S&P 500 (SPY) dropped 0.94%, while the Dow Jones Industrial Average (DIA) fell 0.91%. European markets were mostly lower amid U.S. fiscal cliff drama. In Asia, equities were also lower with Japan’s Nikkei Stock Average slipping 1%. 

Bond ETF Roundup

U.S. Treasury prices rallied today after bond investors remained pessimistic about Washington coming to a viable fiscal cliff agreement. Yields on 10-year notes fell 4 basis points, while 30-year bond yields dropped more than 5 basis points. 

Commodity ETF Roundup

After several days of posting steep losses, precious metals finally gained traction today on sour budget talks. Gold and silver futures rallied 0.66% and 1.12%, respectively. Meanwhile, energy futures turned lower, though prices for soybeans and coffee surged [see also 13 High-Yielding Commodities For 2013].

ETF Chart Of The Day #1: VXX

The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX, A-) was one of the best performers today, gaining a whopping 6.83% during the session. Following Boehner’s statement, the CBOE Volatility Index (VIX) made a reversal, climbing toward 18. VXX gapped significantly higher at the open, only to slide sideways for the rest of the day. The fund settled at $32.54 a share [see also Low Volatility Portfolio].

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ETF Chart Of The Day #2: XLF

The State Street Financial Select Sector SPDR ETF (XLF, A) was one of the worst performers today, shedding 1.80% during the session. Led by a sour performance by financial shares, this ETF gapped significantly lower at the open, only to slide sideways for the remainder of the session. XLF eventually settled at $16.40 a share [see also Financials Free ETFdb Portfolio].

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ETF Fun Fact Of The Day

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Disclosure: No positions at time of writing.