U.S. equities took a steep nosedive today, marking their biggest one-day drop of the year. Investors’ anxiety of Fed tapering nearly reached a boiling point today after the Fed hinted yesterday that the central bank may scale back its massive bond-buying program later this year. Adding to tensions, China’s HSBC Flash Manufacturing PMI came in well below expectations, falling deeper into contractionary territory and to a nine-month low [see The Cheapest ETF for Every Investment Objective].
As Fed fears heightened, all three major U.S. equity indexes tumbled to close in negative territory. The Dow Jones Industrial Average ETF (DIA, A) shed 2.32% after its underlying index tumbled 353.87 points, marking its first over-300 point drop since last November. The S&P 500 ETF (SPY, A) fell 2.48%, while the tech-heavy Nasdaq ETF (QQQ, B+) lost 2.45%.
In Europe, markets also took a steep hit following Bernanke’s commentary; the Stoxx Europe 600 slumped 3.0%. Meanwhile, Japan’s Nikkei Stock Average fell 1.7%, while China’s Shanghai Composite slipped 2.8% on weak manufacturing data.
Bond ETF Roundup
U.S. Treasuries tumbled once again today, sending the 10-year yield to a 22-month high. Yields on 10-year notes rose 11 basis points, while 30-year bonds and 5-year note yields rose 8 and 5 basis points, respectively [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures sold off sharply today, settling just above $95 a barrel on continuing worries of China’s manufacturing sector and the Fed’s commentary. In other energy trading, natural gas and gasoline futures also traded lower. Meanwhile, gold futures plunged 6% to $1,286.20 an ounce.
ETF Chart Of The Day #1: (VXX)
The S&P 500 VIX Short-Term Futures ETN was one of the best performers today, gaining a whopping 11.71% during the session. As the CBOE Volatility Index (VIX) surged near 20, this ETF gapped significantly higher at the open. VXX rallied during the final hours of trading, eventually settling at $22.41 a share [see Low Volatility Portfolio].
ETF Chart Of The Day #2: (XLP)
The Consumer Staples Select Sector SPDR ETF (XLP, A) was one of the worst performers today, shedding 3.02% during the session. Consumer defensive shares were among today’s worst performers, forcing this ETF to gap lower at the open. XLP traded lower throughout the day, eventually settling at $39.17 a share [see Consumer Centric ETFdb Portfolio].
ETF Fun Fact Of The Day
The best-performing regional strategy over the trailing 3-year period has been the Ex-Europe ETFdb Portfolio, which has gained 26.93%.
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Disclosure: No positions at time of writing.