Equity markets opened in red territory on Wednesday morning as investors expressed their concerns over the latest economic data releases, which included ADP employment and factory orders data. On the home front, the S&P 500 lagged behind, shedding 0.25% on the day, while the Nasdaq pulled ahead, managing to clinch a 0.31% gain during an otherwise sour trading session. Gold drifted sideways amidst the choppy trading on Wall Street; futures prices for the precious yellow metal settled near $1,655 an ounce [see also Free Report: How To Pick The Right ETF Every Time].
Worse-than-expected employment data created headwinds for stocks as investors scaled back on risk exposure. The ADP Employment report for April came in at 119,000 new jobs, a noticeable decline from the previous reading of 201,000. Concerns over the health of the manufacturing sector also paved the way for profit taking across the board; the latest factory orders data showed a contraction of 1.5%, which is far worse than the previous reading which showed growth of 1.1% [see also Five ETFs For Doomsday Capitalism].
The State Street SPDR Homebuilders ETF (XHB) was one of the strongest performers, gaining 1.97% on the day. With no housing market data releases this week, XHB has been climbing higher without any major headwinds since bouncing off support above $20 a share on 4/23/2012. This ETF got off to a choppy start, although high volume trading bolstered XHB upwards before lunch time, propelling it to a new multi-year high at $22.43 a share [see also Five Important ETF Lessons In Pictures].
The United States Natural Gas Fund (UNG) was one of the worst performers, shedding 4.26% on the day. Natural gas futures encountered heavy selling pressures on Wednesday following their impressive 3-day rally. Traders were quick to take profits from this volatile commodity ahead of tomorrow’s U.S. natural gas inventories report. Gene McGillian, analyst at Tradition Energy, commented, “We need to see weeks and weeks of smaller-than-expected injections to do anything to that massive storage overhang” [see also 15 Different Ways To invest In Energy With ETFs].
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Disclosure: No positions at time of writing.