Stock exchange traded funds (ETFs) fell on Thursday after a weak employment data fueled new fears about the strength of the economic recovery and commodity prices tumbled.

  • Silver futures notched steep losses Thursday as the main U.S. metals exchange announced two additional increases in trading requirements for silver. Silver for July declined $3.15, or 8%, to $36.24 an ounce on the Comex division of the New York Mercantile Exchange. That was the lowest settlement for a most-active silver contract since March 21, and the largest one-day percentage drop since Dec. 1, 2008. CME Group Inc., which owns Comex and Nymex, late Wednesday announced two additional margin-requirement increases, effective at the end of close Thursday and Monday. Higher margin requirements, or the money needed to put up to trade silver, have ignited wholesale selling of the metal that started on Monday and has pulled down other commodities with it. The exchange has announced margin increases four times since April 26. In response, the ProShares Ultrashort Silver ETF (NYSEArca: ZSL) surged almost 25% in one day.
  • The dollar rose sharply against the euro Thursday due to uncertainty over potential actions next month by the European Central Bank regarding interest rates. The euro tumbled to $1.4530 late Thursday from $1.4849 Wednesday. The euro had hit its highest level since December 2009 Wednesday, at $1.4942, on expectations that ECB President Jean-Claude Trichet would signal that another increase in interest rates was coming in June. He did not give the hint investors were looking for, prompting an exodus from the euro after its 10 percent gain against the dollar this year. Thursday was the common currency’s largest one-day drop against the dollar in 2011. The ECB, like many central banks around the world, has begun raising interest rates this year to counter the effects of rising food and oil prices. That’s weighed on the dollar, because the Federal Reserve is expected to keep rates near zero for a long time. The PowerShares DB Dollar U.S. Bullish Index ETF (NYSEArca: UUP) gained almost 1.5% today.
  • Mexican stocks fell Thursday, unable to cling to gains after a report underscored continued weakness in the labor market of Mexico’s largest trading partner, the United States. A selloff in the commodities market was also a source of downward pressure for the benchmark IPC, which fell 0.8% to 35,267. The losses picked up pace during the last hour of trading, and the IPC headed toward its fourth consecutive decline as miners, retailers, real estate and communications stocks moved lower. Mexican stocks lost grip of gains earlier in the session after the U.S. Labor Department said weekly jobless claims rose by 43,000 to 474,000. Mexican assets and the economy are sensitive to U.S. data because of the countries’ close trading ties. Mexico sends about 80% of its goods to its neighbor. The iShares MSCI Mexico Index ETF (NYSEArca: EWW) dropped almost 1% on Thursday.

Gregory A. Clay contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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