Monday’s “supercommittee” sell-off in equities pushed exchange traded funds indexed to the S&P 500, Dow Jones Industrial Average and Nasdaq-100 back into the red for the year.

If the weakness in equities continues, these ETFs will be counting heavily on a Santa Claus rally to avoid losses for 2011.

“There’s a sense that the U.S. economy is looking down the barrel of a gun but [Washington] cannot figure out what to do,” said Peter Kenny, managing director at Knight Capital Group, in a Dow Jones Newswires report. “These downgrades are coming, as sure as the sun comes up tomorrow. They’re a foregone conclusion.”

The supercommittee is set to announce it has failed to reach a deal to reduce the U.S. budget deficit, according to reports Monday.

“Some have worried that a failure to reach agreement could disappoint investors and lead to another downgrade to U.S. debt. However, with such low expectations of an agreement all along, it is hard to see why failure to reach one should move markets significantly,” said David Kelly, chief market strategist at JP Morgan Funds. “Meanwhile, the aftermath of S&P’s U.S. debt downgrade in August, suggests that Treasury rates should not back up significantly just because of a further ratings cut.”

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