Equity markets drifted sideways throughout most of the day with a downward bias, ultimately closing out the trading session in shallow red territory. The Nasdaq led the way lower, shedding 0.52% on the day, while the Dow Jones Industrial Average proved most resilient, losing only 0.21% as the closing bell rang. Equity indexes on Wall Street flirted with technical resistance levels much like yesterday, however, selling pressures prevailed in the end and the bulls backed off [see Is SPY Overbought?].
The headline news on the home front was a disappointing existing home sales report, although the figure did surpass last month’s reading. In international news, the latest German Purchasing Manager Index came in worse-than-expected, sparking fears that an economic slowdown in the Euro zone was capable of dragging down even the strongest member nation. In fact, the purchasing manager index for the entire currency bloc came in below expectations, further adding weight to the cloud of uncertainty looming over the debt burdened region [see also Five ETFs For Doomsday Capitalism].
The Van Eck Market Vectors Gold Miners ETF (GDX) was one of the strongest performers, gaining 1.81% on the day, bolstered by an unexpected rally in gold spot prices mid-day. While equity markets uneventfully drifted lower throughout today’s trading session, gold staged an impressive rally; futures prices for the precious yellow metal soared from $1,760 an ounce as high as $1,783 an ounce in a matter of less than two hours right before Wall Street’s closing bell [see GLD-Free Gold Bug ETFdb Portfolio]. Commodity producers often times serve as a leveraged play on the underlying resource, and today was no exception as GDX soared upwards, hitting a high of $57 a share.
The State Street SPDR Homebuilders ETF (XHB) was one of the weakest performers, shedding 1.46% on the day. This ETF encountered selling pressures right as the opening bell rang, seeing as how the latest housing market report was less than stellar. Existing home sales in the U.S. came in at 4.57 million for the month of January, which was an improvement from last month’s 4.38 million, but ultimately fell short of analyst estimates of 4.7 million. Despite today’s profit taking, XHB is still up 14% year-to-date [see XHB Returns].
Disclosure: No positions at time of writing.