Dow Slips As Manufacturing Disappoints; Worst NYSE Volume In Over A Decade

[Chart courtesy of MarketWatch.com]

The S&P 500 and NASDAQ ended shrugged off early weakness to close modestly higher, while the Dow Industrials closed slightly lower Monday after ISM data showed US manufacturing shrank unexpectedly in June for the first time since July 2009.

Volume was the worst on the NYSE in a decade and, even when compared to other July 1st Holiday weeks, it was the lowest on record, which does not show much conviction.

The yields on benchmark 10-year and 30-year US Treasuries dropped the most in nearly a month after the Institute of Supply Management said its PMI index slipped to 49.7 in June from 53.5 in May, indicating a slowdown in manufacturing activities.

The Dow Jones Industrial Average (DJIA) shed 0.1 percent, after adding nearly 278 points on Friday. The 30-stock blue-chip’s breadth was equally divided between gainers and decliners.

The S&P 500 Index (SPX) climbed 0.25 percent with telecom fronting the winners among its 10 business groups.

US government securities pared losses Monday after Friday’s slump with the benchmark 10-year yield losing six basis points to 1.59 percent in late afternoon trading. 30-year bond yield also dropped six basis points to 2.69 percent after sinking as much as 10 basis points during the day’s trade.

ETFs in the news:

Agricultural commodities advanced for the day as hot weather conditions continue to dominate much of the Midwest. Soft commodities led the gainers, especially corn and wheat, although headline products of oil and gold retreated for the day.

The Teucrium Corn Fund (CORN) emerged one of the biggest gainers, adding 3.4 percent on the day. Other grain-linked funds such as the ELEMENTS Exchange Traded Notes MLCX Grains Index-Total Return (GRU) and DB Agriculture Long ETN (AGF) also ended in the green, climbing 2.15 percent and 2.32 percent respectively.

Other agricultural products such as Cotton and coffee made impressive gains for the day with the iPath Pure Beta Cocoa (CHOC) vaulting 12.50 percent. The iPath Dow Jones-AIG Cotton Total Return Sub-Index ETN (BAL) also ended 2.85 percent higher on the day.

As markets mostly settled in green despite weak US manufacturing report, volatility-tracking funds tumbled as the so-called fear tracking VIX benchmark slipped further to end at 16.80. The ProShares VIX Short-Term Futures ETF (VIXY) crashed, losing 6.50 percent on the day. The VIX index is on the back-foot after weeks of strength, indicating improved risk sentiment among investors.

The main focus this week will be on Friday’s unemployment numbers, although with many traders being out this week, the true effect will not be felt in the markets until next Monday.

Disclosure: No holdings

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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