Thursday was a mixed day for the markets as bearish pressures in the morning were overturned thanks to positive employment data on the home front. The Nasdaq led the way higher, clinching gains of 0.81% on the day, while the Dow Jones Industrial Average lagged behind in red territory, shedding 0.02%. Gold continued its ascent for the fourth consecutive day this week and futures prices for the precious yellow metal settled near $1,620 an ounce as the trading session drew to a close.
Selling pressures hit the street at the opening bell after Target and J.C. Penny announced mixed December same-store sales results. Euro zone drama resurfaced as France’s borrowing costs started off the year on a high note, following the first debt auction of the year. The French bond auction drew fairly weak demand from investors, showcasing the lingering uncertainty that is still plaguing financial markets overseas. James Gaul, money manager at Boston Advisors LLC, commented, “Everything is still seen in the context of whether the austerity measures taken in Europe force a global recession that will impact U.S. businesses”.
The SPDR Homebuilders ETF (XHB) was one of the best performers, gaining 2.56% on the day, bolstered by improving economic data on the home front. XHB staged a modest rally as prospects for the U.S. housing market improved following better-than-expected developments in the labor market; weekly jobless claims fell to 372,000 versus the previous reading of 387,000 and the ADP employment report surprised investors for the better as well.
The PowerShares DB Agriculture Fund (DBA) was one of the worst performers, shedding 2.15% on the day. A lackluster French bond auction sparked a wave of risk-aversion overseas, spilling over into the currency market [see Commodity Guru ETFdb Portfolio]. Resurfacing Euro debt woes paved the way higher for the U.S. dollar, which effectively created headwinds for commodity prices; grains, meats, and softs across the board sank in red territory on Thursday, dragging down DBA.