Daily ETF Roundup: Sour Manufacturing Spooks Investors

by on September 4, 2012 | ETFs Mentioned:

A sluggish manufacturing report had some investors heading for the hills today, as the latest bit of poor data signaled that the economic recovery is losing its quintessential momentum. According to the Institute of Supply Management’s purchasing managers’ index, activity in the manufacturing sector fell in August to its lowest level since July of 2009. While this might not be a “falling off the cliff” report, a number of investors believe that it is only one of the many red flags in our struggling economy. And while domestic doubts continue to mount, all eyes will remain focused on the ECB meeting later this week. Market have placed high expectations on Mario Draghi and company, as many believe the central bank will announce a bond-buying program and other measures to help the debt-ridden region [see also ETF Insider: Be Wary Of A Steeper Correction]. 

Global Market Overview: Sour Manufacturing Spooks Investors 

U.S. equities managed to recover from their lows during the final hour of trading, but closed narrowly mixed on the day. Tech-heavy Nasdaq (QQQ) was the only index that finished in positive territory, gaining a modest 0.26% during the session. The Dow Jones Industrial Average (DIA) and S&P 500 (SPY), however, landed in the red with the Dow Jones dipping below the psychologically-significant 13,000 level and the S&P trading under 1,400. In Europe, equities ended lower after ratings agency Moody’s changed its outlook on the EU to “negative”, which puts additional pressure on the highly anticipated ECB meeting this Thursday. Meanwhile, Asian markets also closed in negative territory after a sour reading on China’s manufacturing sent the Shanghai Composite down 0.8%. Japan’s Nikkei Stock Average also declined, falling 0.1%.

Bond ETF Roundup 

Following today’s ISM manufacturing report, U.S. Treasuries briefly rose. The rally was short-lived however, as investors turned to this week’s ECB meeting and any further news concerning the Fed’s next move. Many believe that the recent fluctuations in Treasuries reflect how the Fed and ECB’s actions are the main drivers of prices and until any concrete developments are made, this “tug of war” of the safe haven will likely continue.

Commodity ETF Roundup

Headline-driven crude oil fell today, as the contraction in the U.S. manufacturing sector weighed heavily on the commodity. Gold, however, hit its highest level in nearly six months as investors piled into the safe haven investment. Meanwhile, platinum and palladium rose after U.S. automobile manufacturers reported strong sales in August (the two precious metals are used in automobile catalytic converters).

ETF Chart Of The Day #1: XLI

The State Street Industrial Select Sector SPDR ETF (XLI) was one of the worst performers today, shedding 1.05% during the session. As the sour ISM manufacturing report was released, this ETF tumbled from open to mid-morning hours, only to slide sideways for the majority of the day. During the final hours of trading, XLI managed to recoup some of its losses but still ended lower, settling just above its low of $35.82 a share [create customized ETF analysis with the ETF Analyzer].

ETF Chart Of The Day #2: XPH

The State Street SPDR S&P Pharmaceuticals ETF (XPH) was one of the best performers, gaining a whopping 2.84% on the day. Questcor Pharmaceuticals stock, which accounts for nearly 4.8% of XPH’s total assets, surged today after the U.S government allowed the company to pay lower rebates to state Medicaid programs for its drug Acthar. In response, XPH gapped significantly higher at the open, only to inch higher throughout the day. XPH eventually settled below its high of $60.64 a share [see also Baby Boomers ETFdb Portfolio]. 

ETF Fun Fact Of The Day

The Van Eck Egypt Index ETF (EGPT) is up an impressive 51.2% YTD , helping our Africa-Centric ETFdb Portfolio gain 12.6% over the trailing period.

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Disclosure: No positions at time of writing.