Monday ETF Roundup: SPY Hits 2011 Low, GLD Soars On Market Fear

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Includes: GLD, SPY
by: Jared Cummans

Today marked the opening of the fourth quarter and represented a blank slate for some investors. The third quarter of this year erased all of the progress accumulated through the first half, leaving investors frustrated with markets that refuse to follow a stable pattern. Today saw losses across the board, as the Dow Jones Industrial Average lost 2.4% and the Nasdaq suffered a 3.3% blow. Oil had a rough day as well, finishing up the session down $2.49/barrel, leaving the trading day at roughly $74.7/barrel, the lowest prices seen this year. Interestingly enough, October is historically a bad month for stocks, as a number of infamous crashes have occurred during the month, most notable being the beginning of the Great Depression with the 1929 Market Crash.

One of the biggest ETF losers on the day came from the SPDR S&P 500 (NYSEARCA:SPY) which hit its 2011 low along with the underlying S&P 500 Index. Today’s big hit was spurned by Greece, as it yet again brought unfortunate news to markets, putting global markets in something of a headlock. The indebted nation announced that it will miss deficit reduction targets that were originally agreed upon for the bailout deal which once again brought up the prospect of default for the highly indebted country. Today was so harsh that nine stocks fell for every one that rose on the New York Stock Exchange while volume was also robust as the NYSE had a total volume of 5.8 billion shares and SPY saw volumes of nearly 360 million shares, a 21% increase from its normal trading figures. Overall, the popular fund dipped 2.85% today, helping to start the fourth quarter on a very sour note.

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One of the biggest ETF winners on the day came from the SPDR Gold Trust (NYSEARCA:GLD), another product from ETF giant State Street. Gold’s rise came from uncertain markets, as is the typical result from a rocky day. Lately, however, gold has been paralleling the crushing losses in equities, so investors will be happy to see the metal re-establish its inverse relationship. What some may find surprising is that GLD had a daily volume of 13.8 million, which is nearly half of what the fund normally trades. When equities put up bad numbers, gold usually sees heavy inflows, but with the last week putting pressure on the shiny commodity, it seems investors are apprehensive to jump back in with both feet. Overall GLD surged1.85% today and was one of the few asset classes to start the week in the green.

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Disclosure: No positions at time of writing.

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