Bearish momentum returned to Wall Street today, as several disappointing quarterly earnings reports coupled with renewed Spain fears sent both equity and commodity markets into a tailspin. Blue-chip industrial conglomerate 3M (MMM) reported third-quarter revenue that fell short of expectations, while chem-giant DuPont (DD) announced that it had significantly missed its profit marks and plans to make 1,500 layoffs in an aggressive cost-cutting move. While there have been some companies that have bucked the negative trend in quarterly earnings this season, those who believe a potential slowdown is in store for us in the future expect anemic earnings reports to be a commonality for the next few quarters [see Free Report: How To Pick The Right ETF Every Time].
The Dow Jones Industrial Average (DIA) logged its worst single-day drop since June today, after sour earnings forced the index to shed 1.82%. Tech-heavy Nasdaq (QQQ) and the S&P 500 (SPY) also ended in negative territory, dropping 0.88% and 1.44%, respectively. In Europe, markets were broadly lower in response to news that Spain’s economy contracted in the third quarter. The nation’s central bank re-emphasized its warning that tax-revenue shortfalls will likely prevent the debt-ridden government from reaching its 2012 budget targets. Meanwhile, Asian market closed mixed: Japan’s Nikkei Stock Average inched 0.1% higher and China’s Shanghai slipped 0.9%.
Bond ETF Roundup
U.S. Treasuries rose today, as bearish investors fled equities and commodities to pile into the safe haven asset. Last night’s final presidential debate also may have been a factor in today’s gains in government debt.
Commodity ETF Roundup
Sour earnings and Spain fears wreaked havoc on the commodities market today, with nearly every contract landing in red territory. As major concerns for slower global growth heightened, many investors shed their holdings in fear of lower demand for many raw materials.
ETF Chart Of The Day #1: XLB
The Materials Select SPDR ETF (XLB) was one of the worst performers today, shedding 3.01% during the session. DuPont shares, XLB’s 2nd largest holding, plummeted 9.06% after reporting disappointing earnings, forcing this ETF to gap significantly lower at the open. XLB slid sideways for the remainder of the session, eventually settling at $36.14 a share [see also Commodity Guru ETFdb Portfolio].
ETF Chart Of The Day #2: VXX
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) had an incredible run today, gaining a whopping 7.84% during the session. Poor earnings data coupled with continuing Spain drama had Wall Street back on the defensive today, forcing the CBOE Volatility Index to spike more than 10% to above 18. VXX gapped significantly higher at the open, only to slide sideways for the rest of the day, eventually settling below its high of $37.70 a share [see also Low Volatility ETFdb Portfolio].
ETF Fun Fact Of The Day
The new Mining Boom ETFdb Portfolio is up 12.53% in the trailing 13-week period; this strategy is designed for investors who are looking to implement a tactical tilt towards mining, refining, and processing companies, as well as the countries that stand to benefit from further growth in this corner of the market as the global economic recovery picks up steam.
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Disclosure: No positions at time of writing.