Daily ETF Roundup: XLU Pops, VXX Drops

by on March 12, 2012 | ETFs Mentioned:

Stocks got off to a fairly uneventful start on Monday as investors decided to “play it safe” ahead of tomorrows key FOMC decision. Interest rates aren’t expected to go anywhere this time around, although investors will play close attention to the economic commentary issued after the rate announcement itself. Mixed trading on Wall Street kicked-off the week; the Dow Jones Industrial Average tacked on a solid 0.29% gain on the day, while the Nasdaq slipped in red territory, shedding 0.16% for the day [see ETF Insider: Was The Greek Bailout Priced In?]. 

Mixed economic news from overseas coupled with a lackluster U.S. budget deficit paved the way for mixed trading across equity markets. The U.S. government reported a $231.7 billion budget deficit for February, which is higher than the previous reading of $222.5 billion in the same month of last year. In Japan, machine orders data came in better-than-expected, although consumer confidence slipped down to 39.5 from the previous reading of 40. Gold futures drifted lower with a downward bias, settling near the $1,700 an ounce level as the trading session drew to a close [see also 3 ETF Trades For The Next Euro Zone Debt Crisis]. 

The State Street Utilities Select Sector SPDR (XLU) was one of the strongest performers, gaining 1.14% on the day, bolstered by defensively-bullish buying pressures. Euphoria from last week’s Greek bailout deal has spilled over, although investors expressed their caution by opting for relatively “safe” utilities exposure instead of jumping into “riskier” sectors like technology or financials. XLU is down about 1% from a year-to-date perspective thus far [see Simple (But Effective) Safe Haven ETFdb Portfolio]. 

 The S&P 500 VIX Short-Term Futures ETN (VXX) was one of the weakest performers, shedding 4.58% on the day, as uncertainty seemingly evaporated from the markets after the positive conclusion to last week’s Greek debt deal swap. The Volatility Index, commonly referred to as “the VIX”, sank below the 16 level on Monday, hitting a multi-month low at the 15.23 mark [see Low Volatility ETFdb Portfolio].  

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Disclosure: No positions at time of writing.