US equity ETFs ended lower Wednesday with the broad indices retreating a day after the markets posted their biggest gains in a month, as technology bellwethers Intel Corp and IBM Corp’s results came in below (already lowered) expectations.
Treasuries advanced as concern over the European sovereign-debt crisis deepened before a crucial Spanish debt auction Thursday, spurring investor appetite for US assets. Anything less than a successful outcome of that auction will very likely result in a direct hit on equities.
The Dow Jones Industrial Average (DJIA) tumbled 0.6 percent as all but eight of the Dow’s 30 components ended in the red while the S&P 500 Index (SPX) slipped 0.4 percent, although consumer discretionary posted the day’s highest gains. Though most industry groups closed lower, financials fared the worst among its 10 major sectors.
The tech-heavy NASDAQ Composite (COMP) Index dropped 0.4 percent as chipmaker Intel Inc and tech behemoth IBM Corp’s Q1 results disappointed.
The benchmark ten-year US Treasury yield slid 0.02 percentage points to 1.98 percent as the Federal Reserve bought $4.55 billion of longer-term securities to cap short term borrowing costs.
ETFs in the news:
In a day of choppy trading, the iShares S&P California Muni Bond (CMF) soared high, clocking an impressive 4.38 gain for the day.
The iPath S&P 500 VIX Short Term Futures ETN (VXX) showed some green by posting a 1.45 percent gain for the day, as investors vacillated over weak earnings data and European debt crisis outlook.
The United States Natural Gas Fund (UNG) dropped 0.75 percent today after falling to a new lifetime low yesterday. It’ll be interesting to note the journey of this ETF after today’s slight comeback attempt in midweek trading.
Among the day’s top losers, the iShares MSCI Spain Index Fund (EWP) dropped 3.4 percent as Spain came under the spotlight again. Some of the European countries are looking vulnerable and momentum is clearly on the downswing, especially with the PIIGS.
The Market Vectors Solar Energy ETF (KWT) lost 2.55 percent after making progress yesterday. Solar energy firm First Solar tumbled more than 5 percent after rallying yesterday, driving related ETFs down.
The iShares MSCI Chile Investible Market Index Fund (ECH) shed 1.3 percent as markets have become wary of a European contagion in near future, pushing investors away from the emerging arena.
The State Street SPDR Homebuilders ETF (XHB) slipped 1.38 percent, ahead of tomorrow’s existing house sales report. Lower-than-expected home builder’s index and housing starts data earlier in the week spurred today’s sell off, say analysts.
Our Trend Tracking Indexes pulled back some but clearly remain on the bullish side of the line.
Disclosure: No holdings
Contact Ulli