Once again, central bankers left investors feeling disappointed as the ECB’s response to its debt crisis failed to measure up to expectations. Last week, ECB President Draghi pledged to take all necessary measures to preserve the currency bloc. Today however, is a much different story: Draghi emphasized the ECB’s willingness to take “unconventional measures”, but only under strict conditions and after struggling countries submit a request for aid. With investor frustrations at an alarmingly high level, stocks fell for the fourth day in a row: the Dow Jones Industrial Average dropped 0.7%, while the S&P 500 also slid 0.7% and Nasdaq settled 0.4% lower [see also August Edition Of ETF Edge Now Available].
Similar to yesterday’s Fed actions, the ECB also announced that it will keep interest rates unchanged at 0.75%. In response to today’s disappointments, the euro tumbled to its one-week low from its nearly one-month high. Gold futures also fell 1%, while better-than-expected natural gas storage data sent the fossil fuel into a tailspin. In macroeconomic news, U.S. factory orders declined by 0.5% in June; analysts were expecting the number to come in at a 5% gain [see also Inside The Mid-Cap ETF Standouts].
The State Street SPDR Homebuilders ETF (XHB) was one of the best performers today, gaining 1.54% during the session. There is no fundamental reasoning behind the fund’s gain today, but its bizarre price movements could be the result of yesterday’s massive NYSE technical glitch, which affected nearly 150 stocks.
The United States Natural Gas Fund (UNG) was one of the worst performers, shedding a dismal 7.58% on the day. Natural gas futures had its biggest one-day drop since 2009 today, as inventory reports showed that supplies had risen more than expected; storage levels rose by 28 billion cubic feet versus the expected increase of only 23 billion [see also Energy Bull ETFdb Portfolio].
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Disclosure: No positions at time of writing.