Daily ETF Roundup: UUP Soars On Greenback Rally, DBB Drops

by on August 1, 2012 | ETFs Mentioned:

Investors might be recovering from a case of whiplash today, as a tumultuous day of Federal Reserve headlines and an unexpected technical glitch sent stocks lower. After much anticipation, the Fed finally signaled more strongly that it will take new measures to prop up the fragile domestic economy, but to investors disappointment, no further details were given. The news was overshadowed however by a technical glitch that resulted in a halt in trading, with 148 securities listed on the New York Stock Exchange being affected. And as traders panicked over the glitch, stocks slid lower: the Dow Jones Industrial Average fell 0.25%, while the S&P 500 declined 0.29% and Nasdaq dropped 0.66% [see also Seven Simple & Cheap ETF Model Portfolio].

Also during today’s FOMC meeting, the Fed announced that it will keep interest rates unchanged at the “exceptionally low level” of 0.25%. In regards to further stimulus, the Fed remained cautious, holding back from immediately starting a new round of bond buying or taking any other actions. In line with the central’s banks negative economic outlook, the U.S. manufacturing sector contracted once again in July. China also reported a similar decline in manufacturing [see ETF Technical Trading FAQ].

The Invesco PowerShares DB USD Index Bullish ETF (UUP) was one of the best performers, gaining 0.70% on the day. The dollar rose today after the Fed announced its rather sour economic outlook and dissapointed investors with their lack of immediate action.  Alongside the greenback’s rally, this ETF surged higher immediately after the FOMC meeting, settling just shy of its high of $22.88 a share [see our King Dollar ETFdb Portfolio ].

The Invesco PowerShares’ DB Base Metals Fund (DBB) was one of the worst performers, shedding 2.18% on the day. Copper futures plummeted today as poor manufacturing data from China and the U.S. forced prices lower. In response, this ETF gapped significantly lower at the open, only to inch downward throughout the day [see also Four Little Known Factors Driving The Price Of Copper].

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Disclosure: No positions at time of writing.