Though stocks managed to claw their way off their session lows, Wall Street was in for a volatile trading day as disappointing economic reports and looming uncertainties concerning the Fed’s policies put selling pressures on the market. For the most part, equities tumbled amid worries the central bank might scale back or completely end its stimulus measures earlier-than-expected. Adding to today’s downward pressure, the Philadelphia Federal Reserve’s February index of business activity fell 12.5%, bucking analysts’ expectations of a positive reading. Initial claims for unemployment benefits also disappointed investors, rising to 362,000 in the latest week [Be sure to check out the real estate news, trends, tips and tricks over at Dividend.com].
After a rather volatile session, all three major U.S. equity indexes fell to close in negative territory today. The S&P 500 ETF (SPY, A) fell 0.61%, as its underlying index managed to claw back above the widely-watched 1,500 level. The Dow Jones Industrial Average ETF (DIA, A-) slipped 0.27%, while the tech-heavy Nasdaq ETF (QQQ, B+) fell 1.07%.
In Europe, markets were lower after Markit’s preliminary index measuring service and manufacturing activity for the euro zone fell to 47.3, well below expectations. Asian equities also posted steep declines on Fed worries and China’s State Council’s announcement that it will continue to curb increases in property prices. Japan’s Nikkei shed 1.4%, while China’s Shanghai Composite Index tumbled 3%, the largest percentage decline since November of 2011.
Bond ETF Roundup
U.S. Treasuries prices were higher today after U.S. auction of inflation-protected securities. Looming concerns of the Fed’s policies and Washington’s budget talks also weighed heavily on the safe haven. Yields for 10-year notes and 30-year bonds fell 5 basis points, while 5-year note yields fell 4 basis points [see also Seven Simple & Cheap ETF Model Portfolios].
Energy futures fell today as investors digested several sour economic reports from around the globe; U.S. crude took a particularly steep tumble, pressured by looming uncertainties surround the Fed’s policies. Gold and silver, however, finally caught a break as investors returned to the safe havens.
ETF Chart Of The Day #1: (VXX)
The S&P 500 VIX Short-Term Futures ETN (XLI, A) was one of the best performers today, gaining 1.93% during the session. As equities extended their losses, the CBOE Volatility Index (VIX) held above 15, forcing this ETF rally for the majority of the day. VXX’s run cooled off in the final hours of trading, eventually settling at $23.27 a share [see Low Volatility Portfolio].
ETF Chart Of The Day #2: (EWI)
The MSCI Italy Index Fund (EWI, B-) was one of the worst performers today, shedding an abysmal 3.43% during the session. After Markit’s preliminary index measuring service and manufacturing activity for the euro zone came in lower than expected, this ETF gapped significantly lower at the open. EWI inched slightly lower throughout the day, eventually settling at $12.67 a share [see Euro Free Europe Portfolio].
ETF Fun Fact Of The Day
The best-performing themed strategy over the trailing 13-week period has been the RAFI ETFdb Portfolio, which has gained 11.79%.
Disclosure: No positions at time of writing.