Mid Day Roundup: Stocks Tumble Despite Positive Jobs Data

by on July 12, 2012 | ETFs Mentioned:

Stocks tumbled this morning as concerns over corporate earnings and a stagnating global economy heightened, quickly overshadowing the better than expected U.S. jobs report. The domestic sell off followed a broad decline in equities overseas, reflecting the general disappointment of central bankers across the globe. As investors come to the realization that their hopes of more aggressive stimulus measures being taken in the future are not likely to become a reality, the elusive “safety net” that has been able to prop up markets over the last few weeks is now quickly falling away [see also 3 Europe ETFs Holding Their Ground In 2012].

 The U.S. Labor Department announced today that the number of workers filing for jobless benefits fell to its lowest level in over four years. For the week ended July 7, initial jobless claims dropped by 26,000, which in part was due to seasonal factors instead of an uptick in jobs market conditions. Although this is one of the few pieces of good news investors have heard over the last few weeks, it could not help boost markets, whose fall this morning was led by the technology and financial sectors [see also 101 ETF Lessons Every Financial Advisor Should Learn].

Below we outline one ETF that has been impacted by today’s major headlines:

Direxion Daily Financial Bull 3X Shares (FAS)

Leading this morning’s broad market sell off were financial and technology shares, whose outlooks this earnings season have been quite grim. This highly leveraged bull ETF gapped significantly lower at the open, only to drift sideways throughout the mid-morning trading hours. FAS is currently down 2.18% (as of 12:02 PM July 12, 2012) [see also Financials Free ETFdb Portfolio].

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Disclosure: No positions at time of writing.