Stocks sank into negative territory right from the opening bell on Tuesday as pre-earnings jitters and lingering Euro zone debt woes helped bring back the bears on Wall Street. Selling pressures accelerated throughout the morning and every sector on the home front finished on a sour note as the trading session drew to a close. The Nasdaq led the way lower, plunging 1.83% on the day, while the Dow Jones Industrial Average fared a little better, shedding 1.65% on the day [see also Free Report: How To Pick The Right ETF Every Time].
Resurfacing debt drama stemming from the European currency bloc proved to be a major headwind for equity markets all over the globe on Tuesday. Stocks overseas tanked as yields on Spanish government bonds soared after the Economy Minister, Luis de Guindos, commented on the fragile health of the nation’s economy. Italian bond yields also climbed higher as concerns intensified and the wave of uncertainty eventually spilled over onto Wall Street. Amidst the broad sell-off, gold took on safe haven demand; futures prices for the precious yellow metal climbed higher throughout the day, settling near $1,660 an ounce [see also 3 ETFs For The End Of Operation Twist].
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the best performers, gaining 8.01% on the day. Concerns over looming Euro zone debt drama bolstered the VIX Index higher, pushing it past the 20 mark for the first time since the begging of March 2012. James Swanson, chief investment strategies at MFS Investment Management, commented “Europe is a temporary concern. The market is signaling they haven’t fixed the whole problem. Investors will need more reassurance” [see also Euro Free Europe ETFdb Portfolio].
The State Street SPDR Homebuilders ETF (XHB) was one of the worst performers, losing a dismal 4.23% on the day. As one of the sector ETFs leading the rally on Wall Street over the past few months, it’s not terribly surprising to see this fund tumble lower amidst broad-based profit taking pressures [see also 4 Sector ETFs Up Over 20% YTD]. It’s worth noting that trading volumes were at the highest levels since December 2011.
Disclosure: No positions at time of writing.