The bullish stampede on Wall Street came to a halt today as investors were torn between upbeat economic conditions at home and looming debt woes in the Euro zone. On the home front, the Nasdaq led the way higher with gains of 0.31% on the day, while the Dow Jones Industrial Average slipped into negative territory, shedding 0.1% as the trading session drew to a close. Gold continues to inch higher as futures prices held above support at the $1,630 level, closing near $1,640 an ounce as the closing bell rang.
Financials and industrials led the pack on Wall Street as investors rejoiced over encouraging commentary from the latest Fed Beige Book release. Performances across European markets were mixed with a downward bias as investors reacted defensively to a lack-luster German GDP report, which signaled contraction in the region’s economic powerhouse [see Euro Free Europe ETFdb Portfolio]. Selling pressures pushed the euro lower in the currency markets, and strength in the U.S. dollar created headwinds for crude oil; prices for the precious fossil fuel dropped over 1% on the day and settled just above $101 a barrel.
The State Street SPDR Homebuilders ETF (XHB) was one of the best performers, gaining 1.63% on the day. Prospects for the U.S. housing market improved considerably after the Fed Beige Book survey said that economic activity increased “at a modest to moderate pace”. The report stated, “Compared with prior summaries, the reports on balance suggest ongoing improvement in economic conditions in recent months, with most districts highlighting more favorable conditions than identified in reports from late spring through early fall”.
The United States Natural Gas Fund (UNG) was one of the worst performers, sinking lower by 5.06% on the day. Natural gas prices continued their seemingly perpetual decline as the weather outlook in the U.S. painted gloomy prospects for demand expectations [see 25 Ways To Invest In Natural Gas]. Weather conditions have been warmer-than-usual and temperatures are expected to remain above average in the coming days, which effectively created major headwinds for the already struggling commodity.
Disclosure: No positions at time of writing.