U.S. equities logged their biggest daily gain since the U.S. Presidential election today, as Wall Street breathed a collective sigh of relief over encouraging “fiscal cliff” talks in Washington. Overall, opening negotiations from both sides of the House were surprisingly productive, with the issue of tax hikes being brought out on the table. In other economic news, U.S. industrial production fell 0.4% last month, bucking analyst’s predictions of a 0.2% increase; the Federal Reserve reported that the sudden drop in manufacturing activity was in part do to Superstorm Sandy [Download 101 ETF Lessons Every Financial Advisor Should Learn].
All three major U.S. indexes managed to slide into positive territory, with Nasdaq (QQQ, B+) coming out as the biggest winner with its 0.57% gain. The Dow Jones Industrial Average (DIA, A-) and S&P 500 (SPY, A) also logged modest gains of 0.37% and 0.48%, respectively. In Europe, equities closed lower ahead of budget talks in the U.S. and escalating tensions in the Gaza Strip. Meanwhile, Asian markets were mixed with China’s Shanghai Composite slipping 0.8% and Japan’s Nikkei Stock Average rallying 2.2% after a sour economic outlook fueled hopes for a victory by the opposition Liberal Democratic party in next month’s election [see A Week Later, ETF Winners And Losers From The Election].
Bond ETF Roundup
U.S. Treasury prices rallied once again today, but were tempered by the surprising signs of progress towards a bipartisan solution of the fiscal cliff. Rising tensions between Israel and Gaza also weighed heavily on the safe haven.
Commodity ETF Roundup
Energy futures remained in the spotlight today, as escalating tensions in the Middle East sent crude oil up more than 1% and natural gas to fresh one-year highs. Precious metals however, traded lower today with platinum hitting its one-week low after a top South African producer took steps to limit the risk of labor tension and supply worries.
ETF Chart Of The Day #1: MLPI
The UBS E-TRACS Alerian MLP Infrastructure Index (MLPI, A-) was one of the best performers today, gaining 3.20% during the session. Alongside a rally in natural gas futures, this ETF skyrocketed after a quick early morning dip. Trading volumes peaked in the afternoon, sending MLPI to eventually close at its high of $32.24 a share [see our Futures Free Commodity ETFdb Portfolio].
ETF Chart Of The Day #2: XBI
The State Street SPDR S&P Biotech ETF (XBI, C+) was also one of today’s top performers, gaining 3.16% during the session. As investors finally shifted their focus to riskier asset classes, this ETF shot up during afternoon hours. XBI surged higher throughout the day, eventually settling near its high of $84.58 a share [see also High Tech ETFdb Portfolio].
ETF Fun Fact Of The Day
There is currently only one ETF that offers exposure to Sears Holdings (SHLD), whose shares tumbled 18.79% today after the company reported a bigger loss for the latest quarter. The NASDAQ-100 Equal Weighted Index Shares (QQQE, C+) allocates 1.14% of its total assets to Sears Holdings.
Disclosure: No positions at time of writing.