The bears had their heyday on Wall Street today, as yesterday’s stimulus hopes seemingly disintegrated, forcing investors to face the heightened probability of a less than cheery future for the global economy. An onslaught of lackluster economic data on the homefront and from abroad bombarded the markets, sending U.S. equities into a nosedive. While many had relied on the Fed’s extension of Operation Twist to help stabilize the markets, today investors witnessed just how fragile the road to recovery really is: the Dow Jones Industrial Average plummeted 2%, while the S&P shed 2.2% and Nasdaq tumbled 2.4% [see also Seven Simple & Cheap ETF Model Portfolio].
Today’s biggest headliner was the Federal Reserve Bank of Philadelphia’s survey on Mid-Atlantic manufacturing coming in alarmingly lower than expected, indicating a sharp decline in business conditions. U.S. existing home sales also missed the mark, dropping to 4.55 million in May from the previous recording of 4.62 million. Despite the decline in previously owned home sales, U.S. housing prices are on the rise. Last but certainly not least, U.S. jobless claims managed to fall slightly lower last week, but the prior week’s data was revised higher, painting a rather grim picture for the labor market [see Three ETF Charts That Sum Up 2012].
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the best performers, gaining an incredible 11.11% on the day. VXX gapped higher at the start of the trading session only to charge even higher after a slight morning dip. Higher levels of volatility prompted by sour U.S. data bolstered this ETF to close near its high today just shy of $17.71 a share [see The Compelling (And Simple) Case For Low Volatility ETFs].
The iShares MSCI Brazil Index Fund (EWZ) was one of the worst performers, shedding 5.38% on the day. As crude oil plummeted 4% during today’s trading session, this ETF took a major hit seeing as its top holding is Petroleo Brasileiro SA Petrobras, a large oil company [see our BRIC-or-Bust ETFdb Portfolio].
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Disclosure: No positions at time of writing