Stocks extended their losses from yesterday as the bears stuck around on Wall Street. Selling pressures carried over as investors were quite displeased to hear from the FOMC on Tuesday that additional stimulus measures would be unlikely at this time. Profit taking continued as investors dialed back their risk appetites even further. The Nasdaq led the way lower, losing 1.46% on the day, while the Dow Jones Industrial Average proved most resilient, shedding just 0.95%.
Aside from the disappointment arising from the latest FOMC meeting, investors also fretted over worse-than-expected economic data. The March ADP employment report showed a payroll increase of 209,000 in the private-sector, which unfortunately fell short of the previous reading of 230,000. The ISM Services Index also fell short of analyst expectations. The figure came in at 56%, versus last month’s reading of 57.3%.
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the few products in green territory, gaining 2.22% on the day. Volatility spiked early in the morning as traders were quick to pull the sell trigger and continue yesterday’s profit-taking frenzy. VXX peaked at $18.35 a share before turning lower in the afternoon. The fund declined below its opening price in the final hours of trading, although it still managed to clinch a minor gain for the day.
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(click to enlarge)The Van Eck Market Vectors Gold Miners (GDX) was one of the worst performing ETFs, dropping a dismal 4.18% on the day. The fact that the FOMC made no hints of additional quantitative easing has created major headwinds for the precious yellow metal. With inflation worries off the table, at least for now, traders continued to sell off gold. Futures prices for the metal hit a multi-week low at $1,613 an ounce, dragging down major gold mining stocks along with it. Today’s sell-off has put a serious dent in GDX. This ETF is now down 9% from a year-to-date perspective.
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Disclosure: No positions at time of writing.
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