The tug of war between domestic economic data releases and developments overseas in the debt burdened currency bloc continues. Stocks fluctuated between minor gains and losses on Thursday as investors digested worse-than-expected employment data at home, along with an encouraging debt auction on the other side of the Atlantic. The Nasdaq led the way higher, with gains of 0.51% on the day, while the Dow Jones Industrial Average lagged behind, inching higher by 0.17%. Gold dipped a little lower on the day, with futures prices for the precious metal settling nearing $1,650 an ounce.
U.S. stocks fell in early morning trading as investors got a little spooked following a concerning employment data release on the home front; the latest weekly jobless claims report came in worse-than-expected, with 399,000 people filing for unemployment benefits versus the expected 380,000. The retail sales figure also disappointed, with growth in December coming in at 0.1%, versus the expected 0.3%. Nonetheless, investors on Wall Street shrugged off the lackluster data as encouraging developments overseas stole the spotlight [see ETFs To Play AAA Europe].
The Vanguard European ETF (VGK) was one of the best performers, gaining 0.99% on the day, bolstered by euphoria stemming from the otherwise gloomy Euro zone. Spain’s Treasury hosted a successful debt auction and raked in just under 10 billion euros, which was practically double the intended target. “It’s always good to get off to a good start in the New Year and this is the latest in a string of solid Spanish auctions. Yields are down sharply and demand was robust,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy. The Italian debt auction also went well as yields dropped, paving the way higher for European stocks across the board.
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the worst performers, loosing 1.6% on the day. The Volatility Index (VIX) has been inching lower since the start of 2012 as optimism has gradually begun the permeate the markets once again. Uncertainty continues to evaporate as economic data releases on the home front have been overwhelmingly positive coupled with encouraging developments in the financially fragile Euro zone [see Low Volatility ETFdb Portfolio].
Disclosure: No positions at time of writing.