Daily ETF Roundup: VXX Surges, USO Capsizes

by on May 4, 2012 | ETFs Mentioned:

Market swiftly moved south on the day as hiring slowed for the month of April, despite the dip in unemployment. What many realized was that the drop to 8.1% was not necessarily because of new hires, but because an increasing number of people have exited the labor force, as finding a job has been too difficult a task for many. All in all, the Dow shaved off about 170 points while the S&P 500 lost 1.6%, making today one of the worst trading sessions of 2012. Likewise, the Nasdaq took a big hit as it shrank by nearly 2.3% [see also 5 Simple ETF Trading Tips].

While equities struggled to get going, some commodities had an even tougher time. Both crude oil and natural gas experienced harsh sell-offs after the bad hiring data. Today witness crude’s first close below $100 in recent memory as the commodity dipped 3.9% for the session. With markets pulling every which way, the future seems especially hazy and no investor is sure of where stocks are headed. For the time being, we outline two of the most notable ETF performances on the day to keep investors up to date with yet another busy day in the world of trading.

One of the biggest ETF winners on the day was the S&P 500 VIX Short-Term Futures ETN (VXX) which jumped by more than 4.2%. The fund, which tracks front-month VIX futures, has had a generally tough year, but has gained some momentum in recent days as equity benchmarks have turned sour. Hiring for the month of April was slated to come in at 160,000 but instead was 115,000, a weak figure that sent markets plunging and this ETN through the roof. If today’s markets were a sign of things to come, this will be a good fund to watch for the next few months [see also 5 Market Experts You Need To Follow On Twitter].

One of the worst ETF performers on the day was the United States Oil Fund (USO). This commodity ETF tracks front-month WTI crude contracts and is one of the more popular funds in our Oil & Gas ETFdb Category. USO sank by 4% on the day as selling pressures infected crude oil and this fund. To give you an idea of how massive of a sell-off it was, USO traded around 3.5 times is average daily volume today with a total of 20 million shares changing hands. As the summer months near, most will look for crude prices to rise, but a weak economy could wreak havoc on this fossil fuel [see also 25 Ways To Invest In Crude Oil].

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Disclosure: No positions at time of writing.