Daily ETF Roundup: VXX Jumps On Uncertainty, VGK Drops On Greece Jitters

by on March 6, 2012 | ETFs Mentioned:

The bears made an appearance on Wall Street on Tuesday as resurfacing Euro zone debt woes sparked a global sell-off. The Dow Jones Industrial Average gave into selling pressures, shedding a dismal 1.57% on the day, while the Nasdaq fared slightly better, turning in a loss of 1.36%. Gold failed to take on safe haven appeal and the precious metal plunged alongside stocks; futures prices for the yellow metal settled near $1,675 an ounce as the trading session drew to a close [see ETF Insider: Did Wall Street Forget About Greece?].

With no major economic data releases on the home front today, it’s no wonder that investors kept their eyes fixed on headlines from overseas. Aside from all of the uncertainty stemming from the upcoming Greek debt swap, investors were less than thrilled about the currency bloc’s latest GDP data. Economic growth in the Euro zone came in unchanged at 0.7%, while household consumption in the region dropped came in at negative 0.4%, a slight deterioration from the previous reading of 0.3%. Strength in the U.S. dollar put downward pressure on crude oil as well; futures prices for the fossil fuel closed near $105 a barrel [see Euro Free Europe ETFdb Portfolio].

The S&P 500 VIX Short-Term Future ETN (VXX) was one of the best performers, gaining 7.61% on the day, bolstered by intensifying uncertainties surrounding the Greek bailout. Investors should note that the underlying Volatility Index, the “VIX”,  jumped nearly 16% on the day, settling above the 20 mark, which is more than double the returns generated by VXX [see Low Volatility ETFdb Portfolio]. 

 

The Vanguard European ETF (VGK) was one of the worst performers, shedding a dismal 4.1% on the day, pressured lower by resurfacing worries surrounding the Greek debt swap slated to take place later in the week. Investors are looking ahead to the deadline on Thursday at which point private investors are expected to voluntarily offer up their government bonds in a debt deal swap that will devalue their holdings by more than half. VGK is up 6% year-to-date after today’s nasty sell off [see Three ETF Trades For The Next Euro Zone Debt Crisis]. 

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Disclosure: No positions at time of writing.