Market ETFs Plummet Amid Disappointing Q3 Earnings Reports

Strategic Insights -

Major market exchange-traded funds (ETFs) declined sharply on Thursday, October 15, 2009, following a string of disappointing earnings reports from prominent companies, including General Electric (GE) and Bank of America (BAC). The latter reported a Q3 loss of $0.26 per share, missing the Street's mean estimate of a loss of $0.21 per share. GE, too, failed to meet expectations, with Q3 earnings of $0.22 per share, including $0.05 per share in charges, falling short of the Street's estimate of $0.20 per share. The disappointing reports led to a decline in major banking and brokerage shares, with the Financial Select Sector SPDR (XLF) plummeting 2.44%. Other notable decliners included the tech-heavy PowerShares QQQ (QQQQ) and the Direxion Financial Bull 3X fund (FAS).

Key Takeaways:

  • The SPDR S&P 500 (SPY) declined by 1.06% due to disappointing Q3 earnings reports from companies like General Electric and Bank of America.
  • Bank of America (BAC) reported a Q3 loss of $0.26 per share, missing the Street's mean estimate of a loss of $0.21 per share.
  • General Electric (GE) reported Q3 earnings of $0.22 per share, including $0.05 per share in charges, falling short of the Street's estimate of $0.20 per share.
  • The Financial Select Sector SPDR (XLF) plummeted 2.44% due to the disappointing earnings reports.
  • The Direxion Financial Bull 3X fund (FAS) declined by 6.51%, while its bearish counterpart, FAZ, increased by 6.71%.