Gold exchange traded funds rose on Wednesday while Portuguese bond yields surged one day after Moody’s slashed its debt rating on government debt into “junk” status.
CurrencyShares Euro Trust (NYSEArca: FXE) was down nearly 1% at last check on worries credit woes are spreading from Greece and into other weaker countries on the periphery such as Portugal and Ireland.
SPDR Gold Shares (NYSEArca: GLD) was up about 1% as gold futures rallied to $1,530 an ounce.
The “risk-off” mood in markets was also seen in ETFs tracking the dollar, Treasuries and CBOE Volatility Index futures.
The iPath S&P 500 VIX Short-Term Futures ETN (NYSEArca: VXX) added 2.2%, PowerShares DB US Dollar Bullish (NYSEArca: UUP) rose 0.7% and iShares Barclays 20+ Year Treasury Bond (NYSEArca: TLT) climbed 0.5%.
The Portugal downgrade hammered ETFs that invest in European stocks. The largest percentage decliners Wednesday included iShares MSCI Europe Financials (NasdaqGM: EUFN), iShares MSCI Spain (NYSEArca: EWP) and iShares MSCI Italy (NYSEArca: EWI). All suffered declines of at least 2%.
U.S. stocks were also weak after a disappointing ISM service sector report. [ETFs Look to Jobs Report]
Financials again were the worst sector as Bank of America (NYSE: BAC) and Wells Fargo (NYSE: WFC) shares both lost more than 2%. [Financial ETFs Fall]
Global credit markets were unsettled Wednesday on the Portugal news and after China again boosted interest rates. [Portugal, China in Focus]
In industry news, one ETF that investors may be overlooking is designed to provide the investor with a hedge against the inflation rate in the U.S. [Chart of the Day]
CurrencyShares Euro Trust
