Daily ETF Roundup: GDX Soars On Inflation Concerns, VXX Drops On Fed Decision

by on January 25, 2012 | ETFs Mentioned:

Stellar earnings from Apple and a pledge from the Fed to keep interest rates low until 2014 were enough to spark a broad-based rally on Wall Street today. Euphoria from Apple’s impressive quarterly results carried the tech sector higher and the Nasdaq led the way, clinching gains of 1.14% on the day. The Dow Jones Industrial Average on the other hand lagged behind, finishing the day higher by just 0.64%. Gold soared nearly 3% on the day after the Fed’s decision to keep rates at historical lows; futures prices for the precious metal settled just above $1,700 an ounce for the day [see also ETF Insider: Beware Of Earnings Volatility].

Apple’s fourth-quarter performance results lifted the street; the tech-behemoth raked in an impressive $13.1 billion in net income and its balance sheet boasts nearly $100 billion in cash [see ETFs With Exposure To Apple]. The FHFA Home Price Index also came in better-than-expected; U.S. home prices rose a seasonally adjusted 1% versus the previous reading of -0.7%. Encouraging news were also abundant overseas as the latest U.K. GDP came in at 0.8%, a modest increase from the previous reading of 0.5%.

The Van Eck Market Vectors Gold Miners (GDX) was one of the best performers, gaining a whopping 6.58% on the day. Gold miners were bolstered by strength across equities coupled with a surge in gold prices. Futures contracts for the yellow metal soared after the Fed announced their commitment to keeping interest rates at historically low levels until late 2014, which inevitably sparked buying euphoria in the stock market and rekindled inflation fears [see Gold ETFs: Factors To Consider].

The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the worst performers, shedding 4.21% on the day, as investors rejoiced over stellar earnings from Apple along with the Fed’s commitment to keeping borrowing costs ultra-low for another two years. The Fed set an inflation target at 2%, although Ben Bernanke did comment that the recovery is still fragile; the chairman expressed his concerns that weakness in the housing market was holding back growth and hindering stimulus efforts [see also Financials Free ETFdb Portfolio].

Disclosure: No positions at time of writing.