Positive developments in the Spanish debt crisis pushed stocks into positive territory early this morning after Germany’s top court announced its approval of the newest version of the Euro Zone’s latest bailout program. But as sour U.S. earnings reports and forecasts started pouring in, the early stock rally quickly fizzled, dragging major indexes into the red. For the most part, investors remain rather pessimistic about this quarter’s earning season, which seems to be overshadowing all other financial news [see also Seven Simple & Cheap ETF Model Portfolio].
One of today’s biggest headlines was the highly anticipated earnings report from Alcoa (AA), which was announced yesterday after the closing bell. The blue-chip aluminum producer reported a quarterly loss, but its adjusted earnings and revenue came in above expectations. In the technology sector, two microchip makers cut their second quarter revenue outlook to reflect weaker industry conditions. As earnings reports keep piling in, markets will likely struggle to find a definitive direction over the course of this quarter’s earnings season [see also What Are Futures? The Ultimate Beginner's Guide].
Below we outline one ETF that has been impacted by today’s major headlines:
Direxion Daily Semiconductor Bull 3x Shares (SOXL)
After semiconductor manufacturer Applied Materials (AMAT) slashed its earnings forecast today, this ETF tumbled significantly lower, reflecting the weaker-than-expected industry conditions. Several other Semiconducter ETFs, like Van Eck’s SMH and State Street’s XSD, were also in red territory during this morning’s trading session. Currently, SOXL is down 4.66% (as of 11:42 AM July 10, 2012) [see also High Tech ETFdb Portfolio].
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Disclosure: No positions at time of writing.