Equity indexes broadly drifted lower throughout the day, although a last-hour rally on Wall Street helped many benchmarks to end the day in green territory. Investors expressed their concerns over lackluster retail sales data at home coupled with looming debt-deal drama in the currency bloc overseas. On the home front, the Dow Jones Industrial Average proved to be most resilient, gaining 0.03% on the day, while the S&P 500 slipped into negative territory, shedding 0.09% as the trading session drew to a close [see Five Things We Learned At Inside ETFs].
Domestic stocks were fairly shaky on Tuesday as latest U.S. retail sales report showed growth, although the figure missed analyst expectations. Retail sales in January were expected to have grown by 1%, however, the figure came in at 0.4%, which is still an improvement from last month’s flat reading. In international news, England’s CPI came in at 3.6%, showing a slight down-tick in inflation, given the previous reading of 4.2%. Good news came from Germany as the latest economic sentiment survey from the nation came in at 5.4, a significant improvement from the previous reading of -11.8 [see ETF Insider: Is Euro Zone Optimism Here To Stay?].
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the strongest performers, gaining 2.95% on the day, bolstered by lingering uncertainty stemming from the Greek bailout coupled with lackluster data on Wall Street. Domestic equities have been on a roll since the new year started, and thus today’s slightly worse-than-expected retail sales report gave investors a reason to sell and take profits [see ETFdb 2012 Portfolio].
The Vanguard European ETF (VGK) was one of the worst performers, losing 1.06% on the day. European markets took a hit after EU officials ramped up the pressure on Greek policymakers to deliver the agreed upon budget cuts in exchange for the much needed second bailout. Although lawmakers have been moving along in the negotiations process, several key issues remain unresolved, and will likely be a source of volatility in the foreseeable future. Luxembourg Prime Minister Jean-Claude Juncker commented, “I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program”.
Disclosure: No positions at time of writing.