Daily ETF Roundup: VGK Bolstered By Debt Negotiations, UNG Continues To Sink

by on January 31, 2012 | ETFs Mentioned:

Stocks endured yet another bumpy trading session as indexes oscillated between gains and losses for most of the day thanks to mixed economic developments. On the home front, Exxon Mobil posted strong quarterly earnings, although lackluster home prices data overshadowed the energy giant’s profits. The Nasdaq proved to be most resilient, gaining 0.07% on the day, while the Dow Jones Industrial Average slipped lower, shedding 0.16% as the trading session drew to a close. Gold prices whiplashed back-and-forth as investors dealt with conflicting developments; futures contracts for the precious metal soared as high as $1,750 an ounce, only to tumble back to $1,730 an ounce in a matter of hours, and finally settle near the $1,740 level as the closing bell rang.

Sentiment took a pessimistic turn on Wall Street after a string of worse-than-expected data releases [see also How To Invest Like UBS In 2012]. The Case-Shiller home prices index came in at -1.3%, which showed a modest slump from the previous reading of -1.2%. Consumer confidence data was also disappointing; the latest reading came in at 61.1, missing estimates entirely as it fell short of the previous reading at 64.5. Developments overseas were mixed as well after German employment came in better-than-expected, although Canadian GDP dipped to -0.1% on a month-over-month basis.

The Vanguard European ETF (VGK) was one of the best performers, gaining 0.65% on the day, bolstered by encouraging developments in the debt burdened currency bloc. Investors were cheerful to see that Greece is moving closer towards finalizing an austerity plan; Finance Minister Evangelos Venizelos commented, “We are one step — I would say it is a formality— away from finalizing the debt relief agreement”. The debt deal includes a 50% haircut to Greek bondholders along with a longer repayment period and lower interest rates [see Euro Free Europe ETFdb Portfolio].

The United States Natural Gas Fund (UNG) was one of the worst performers, shedding 6.91% on the day, as natural gas prices resumed their volatile descent. Fuel prices plummeted over 9% in the commodities market after a government report signaled that U.S. production hit a record high. Natural gas has been absolutely beat down over the past few months as weak demand, thanks to a mild winter, coupled with piling supplies, has paved the way for record-low prices [see also Energy Bull ETFdb Portfolio].

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Disclosure: No positions at time of writing.