US stocks tumbled Tuesday with the Dow and the NASDAQ ending lower for the fourth straight day as investors became wary of corporate earnings looking softer than forecasted based on a string of weak results by technology companies.
Stocks opened strong earlier over news that EU finance ministers agreed late Monday to release an initial €30 billion to Spain by the end of July to help the country shore up its stricken banks.
Treasury 10-year yields slipped as refuge appeal of US assets rose amid concerns the European debt-crisis is deepening after Bank of England Governor Mervyn King said British economy may slip further into a double-dip recession if European leaders fail to act fast. Sentiments soured further after a US survey of small business optimism came in softer than anticipated.
The Dow Jones Industrial Average (DJIA) shed 0.7 percent. Within the blue-chip index, 20 of the 30 components lower for the day. The S&P 500 Index (SPX) dropped 0.8 percent with industrials and materials faring the worst among its 10-business groups.
The benchmark 10-year Treasury yield dropped one basis point to 1.50 percent while yield on 30-year bonds fell two basis points to 2.60 percent in late afternoon trading, New York time.
Besides the upcoming earnings season, the main news is Europe all the time. In case you missed it, Rick Santelli interviewed Nigel Farage a couple of days ago who, in his usual candid manner, has this latest assessment:
ETFs in the news:
As markets turned choppy on weak second-quarter earnings by Corporate America, early gains in exchange-traded funds driven by news of funds for Spanish banks fizzled away rather quickly.
The so-called fear-tracking CBOE Volatility Index (VIX) jumped 4.12 percent as risk appetite diminished quickly as the day wore on.
The ProShares VIX Short-Term Futures ETF (VIXY) jumped 2.97 percent, emerging as one of the top performers among non-leveraged funds. Other VIX tracking funds like the Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) also rose, up an impressive 2.76 percent on the day.
The United States Natural Gas Fund (UNG) reversed its trend, losing 4.83 percent for the day after US Energy Information Administration said gas stockpiles have grown 23 percent in June over the same period last year. Increase in shale gas production is expected to push inventory to a record 4 trillion cubic feet by the end of October from the current 3.1 trillion cubic feet, the EIA report observed.
Our Trend Tracking Indexes (TTIs) inched lower and have reached the following positions in regards to their respective long-term trend lines:
Domestic TTI: +2.30%
International TTI: -3.11%
Disclosure: No holdings
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