The unexpected acceleration of job losses sent the broader U.S. market down by more than 2%... right out of the gate. Moreover, the growth sector ETFs experienced the sharpest smackdowns.
The consumer discretionary barometer, SPDR Retail (NYSE: XRT [1]), was down -4.2% by mid-trading-day 7/2/09. Similarly, SPDR Homebuilders (NYSE: XHB [2]) felt a painful -3.7% sting.
Meanwhile, there was very little love for SPDR Select Energy (NYSE: XLE [3]) with a -3.5% pullback. A closec cousin, iShares GS Natural Resources (NYSE: IGE [4]), plummeted -3.0%.
It's hard to envision a scenario where resources don't find there way back to the heart of investor desire. On the other hand, record savings rates, rising unemployment and 7-month lows on mortgage applications may put the kabosh on middle class spending for homes, cars, appliances, furniture, clothing and so forth.
Then there are the go-to safety spots like Consumer Staples (NYSE: XLP [5]) with a -1.0% loss mid-day. Consumer "must-have" goods from the General Mills or Procter/Gamble's of the world can continue to prosper in this environment. Of course, Vanguard Health Care (NYSE: VHT [6]) was also down less than other sectors, but health care reform legislation seems to keep VHT from significant upward momentum.
There was a sub-sector surprise on this pre-holiday, broad market sell-off. Specifically, iShares GS Semiconductors (NYSE: IGW [7]) SPDR Semiconductors (NYSE: XSD [8]) were down -1% and -1.5% respectively.
While the broader market has essentially flat-lined for the months of May and June, garnering most of its recovery gains in March and April, semiconductor ETFs have continued their impressive ascent. It doesn't hurt when a fund loses less on the down days... since it'll require less on the up days to come out a winner.
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Disclosure Statement: ETF Expert [11] is a web log ("blog") that makes the world of ETFs easier to understand. Pacific Park Financial, Inc. [12], a Registered Investment Adviser with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. [13] web site.