GDP Data Comes In Strong, But ETFs Left Wanting

All News:

• Platinum and Palladium ETFs are Long-Term Bets
• Nasdaq ETF Near 200-Day Average as Apple, Cisco Weigh
• Bank ETFs Hit Again on Economy, Capital Levels

Exchange traded funds (ETFs) turned south this morning, despite the government reporting a jump in consumer spending and exports that had the economy growing 3.2% in the final quarter of 2010.

• The U.S. economy gathered speed in the fourth quarter with a big gain in consumer spending and strong exports pushing demand ahead at the fastest clip in more than 26 years. The economy grew at a solid 3.2 percent annual rate in the final three months of 2010, but it would have risen at a 7.1 percent rate if businesses had not put the brakes on rising inventories, the Commerce Department said on Friday. The SPDR S&P 500 ETF (NYSEArca: SPY) is flat so far today.
• Amazon.com (NASDAQ: AMZN) stock dropped about 8% after the online bookseller’s operating margins fell short of market expectations. Amazon.com Inc. said Thursday that its fourth-quarter earnings rose by 8%, thanks to strong holiday sales, though the company’s operating margins for the period came in below Wall Street’s projections. Amazon’s results are delivering a big hit to Internet HOLDRs (AMEX: HHH), which is down nearly 4% today. Amazon is 44.2% of the fund.
• Microsoft Corp. (NASDAQ: MSFT)  shares are down about 2% after the software giant posted a slight drop in quarterly profit, but said revenue rose 5% thanks to strong demand for its Kinetic video game device and Office software. iShares S&P North America Technology (NYSEArca: IGV) is down nearly 1% this morning; Microsoft is 6.9% of the ETF.
• Asian markets ended mostly lower Friday, with stocks in Japan sliding a day after Standard & Poor’s cut the country’s sovereign-debt rating, while Indian shares stumbled as automobile and real-estate firms declined over interest-rate concerns. “The S&P downgrade could likely push the government to quicken the tax-system reforms and fiscal reconstruction” said RuiXue Xu, rates strategist at RBS Securities. iShares MSCI Japan (NYSEArca: EWJ) is down 1% today.

Gregory A. Clay contributed to this article.