American equity markets capped off a volatile week in the red as continued worries over Europe -- this time with regard to Italian banks -- and weakness in the tech sector led to losses across the board.
The Dow finished the day lower by close to 1% while the broader indexes slid by a little more; the S&P 500 sank by 1.2% and the Nasdaq fell by 1.3%. Commodity markets were more mixed as gold tumbled by $20 an ounce to finish just above the $1,500 mark, while oil recovered slightly from yesterday's sell-off, finishing the day up marginally.
Softs continued this mixed trend as coffee, cotton, and orange juice finished the day on a high note, but wheat, corn, and cocoa all suffered losses, including a nearly 2.2% decline in the corn market. Meanwhile, commodity and bond markets saw further inflows to the U.S. dollar and the euro lost nearly a cent against the greenback while the two-year note continued to see its yields fall, as it now yields only 0.34%.
One of the biggest ETF winners on the day was the iPath S&P 500 VIX Short-Term Futures Fund
Thanks to these concerns spreading to one of the world's 10 largest economies, as well as ongoing worries over the Greek situation, traders fled equities across the board and sought protection in the safe havens of Treasury bonds and VXX to wait out the storm. (See charts of VXX.)
One of the biggest ETF losers was the Market Vectors Gold Miners ETF
"The sour economic news recently, combined with dwindling hopes for any further quantitative easing in the near term, are weighing heavily on the metals," said Brien Lundin with the Gold Newsletter. This gloom over the yellow metal's near-term outlook hit the gold miners pretty hard in Friday trading, causing the fund to sink more than the overall market and pushing the two-day loss for GDX to 3.8%. (See the fundamentals of GDX).
Disclosure: No positions at time of writing.
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