Equity markets endured a rocky day of trading as mixed economic data paved the way for profit-taking and relatively light-volume price action. The Dow Jones Industrial Average proved most resilient, gaining 0.17% on the day, while the Nasdaq lagged behind, slipping into negative territory and closing down 0.01%. Conglomerates and industrial goods stocks led the way higher after a positive factory orders report on the home front, while health care stocks and financials sank as investors gave into profit-taking pressures [see also Inside The Simple, Surprisingly Effective Dividend ETF].
Wall Street started off the day in red territory as investors were quick to take profits following yesterday’s strong performance. Nonetheless, positive economic data at home was enough to bolster indexes higher as the trading day neared a close. Ford Motor Company revitalized hopes for the beat-down U.S. auto industry after the carmarker’s December sales topped analysts’ estimates; also, motor vehicle sales as a whole for the previous month came in at 13.6 million, which was in line with analysts’ expectations. U.S. stocks regained bullish momentum as investors rejoiced over better-than-expected factory orders data, which showed growth of 1.8% versus the previous reading of -0.4%.
The United States Natural Gas Fund (UNG) was one of the best performers, gaining 3.86% on the day. Natural gas futures jumped upwards of 4% on Wednesday thanks to weakness in the U.S. dollar coupled with improving economic hopes at home [see Energy Bull ETFdb Portfolio]. The outlook for energy demand was bolstered thanks to revitalized growth prospects for the U.S. recovery given the overwhelming majority of better-than-expected economic data releases over the past few weeks.
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the worst performers, shedding 1.96% on the day [see also Low Volatility ETFdb Portfolio]. Volatility simmered down as uncertainty evaporated from the marketplace after the International Council of Shopping Centers said in a statement that same-store sales in December are projected to have increased by more than previously estimated. “We’re happy about the economic data stream, which has continued to show improvement since September, and largely been ignored because of our laser focus on Europe,” said Art Hogan, equity strategist for Lazard Capital Markets.