The Dow Jones Industrial Average sank below 10,000 and exchange traded funds (ETFs) turned south in early trading this morning as fears about another round of global economic slowdown persist and tensions on the Korean peninsula increase.
After a rough end to Monday saw the Dow Jones industrials close at 10,066, a 12% drop since its recent peak at 11,205 on April 26, the Dow fell sharply to open 2.5% lower at 9,817.78 in early trading Tuesday. With European leaders expressing concern over economic growth on the continent, warning that their economy would stagnate without governments making major reforms to promote growth, the European woes continue to lead market performance. [8 Ways to Safeguard Your Money.]
- SPDR Dow Jones Industrial Average (NYSEArca: DIA)
The volatility of the market has led investors heading for the exit on stocks like oil and the euro, for the perceived safety of government bonds as the U. S. Treasury prices surged, pushing yields and interest rates lower. The benchmark 10-year note’s yield fell to its lowest level since April 2009. [5 ETFs to Watch in Topsy-Turvy Market.]
- iShares Barclay’s 7-10 Year Treasury (NYSEArca: IEF)
Despite the gloomy start in trading this morning, U. S. consumer confidence rose more than expected in May to its highest level since March 2008, due in part to improved job prospects. The Conference Board’s confidence survey shows the index rose to 63.3, as pessimism fades and measures to create jobs begin to take hold, potentially encouraging Americans to spend. [Retail ETFs: Improving Sales Numbers and Optimistic Consumers.]
- SPDR S&P Retail (NYSEArca: XRT)
Oil sank below $68 a barrel Tuesday following a decline in share prices and ever-present fears of weak global economic growth fueled by the struggling euro. While oil prices tend to rise and fall with global markets, which tends to then indicate investors’ outlook on growth and the economy, analysts believe a potential trend may be developing as oil has not fallen as dramatically as global shares. While oil prices seem to be standing on their own, market performance and this week’s reports have to contribute. [Following the Gyrations of Oil and Natural Gas ETFs]
- United States Oil (NYSEArca: USO)
Aaron Hurst 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.