Equity benchmarks finally snapped their losing streak as investors rejoiced over better-than-expected economic data on the home front. The Nasdaq led the way higher for a second day in a row this week, gaining 0.66% as the session drew to a close, while the Dow Jones Industrial Average lagged behind, inching higher by 0.22% on the day. Looming uncertainties from Spain kept a lid on commodities; gold and crude oil futures drifted sideways throughout the day, settling near $1,620 an ounce and $84 a barrel respectively.
Stocks kicked off the day with a bang as investors cheered on encouraging service sector data; the ISM nonmanufacturing figure for May came in at 53.7% versus the expected 53.5%. Overseas, confidence deteriorated as eurozone retail sales data missed; this figure contracted by 2.5% versus the previous reading of negative 0.2%. The Bank of Canada kept interest rates steady at 1.0% as many had expected, and the reaction in the currency market was fairly uneventful back-and-forth trading, perhaps suggesting that economic growth expectations remain clouded with uncertainty as investors digest developments in the overseas currency bloc.
The SPDR Homebuilders ETF (XHB) was one of the best performers, gaining 2.47% on the day. This ETF climbed higher from the opening bell Tuesday morning, settling near $19.20 a share around lunch time; bullish pressures returned in the afternoon and XHB continued its trek higher, closing near the high of the day at $19.56 a share. Despite the correction over the past few weeks, XHB is still up 14% from a year-to-date perspective.
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the worst performers, losing 2.31% on the day. The Volatility Index inched lower throughout the trading session, finally managing to settle just below the 25 mark as the closing bell rang. Uncertainty levels should be expected to remain elevated until the VIX simmers back below the 20 level, which could take anywhere from several weeks to months.
Disclosure: No positions at time of writing.
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