Econ Report Card: Index ETFs Diss GDP, Consumer Sentiment (SPY, DIA)

---

Major Indexes and Index ETFs have fallen today due to a lackluster GDP Economic Report and Consumer Sentiment Report

The S&P 500 and the Dow Jones Industrial Average have fallen today on a lackluster GDP Report and Consumer Sentiment Report.  Index ETFs including the SPDR S&P 500 ETF (NYSEARCA:SPY) and the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) have fallen as well and are likely to close in red before today’s close.

The drop likely comes from lackluster GDP and Consumer Sentiment reports released earlier today.  According to The US Commerce Department, GDP for fourth quarter of 2011 increased 2.8% compared to a 1.8% increase in third quarter.  Although this is improvement, 2.8% is nothing to write home about and indicates that the US economic recovery is still very fragile.  Consumer Sentiment was not much to write home about either, as the consumer sentiment reading rose from 69.9 in December to 75.0 in January.  Consumer Sentiment is an indicator of Consumer’s confidence in the marketplace and business, and although Consumer sentiment has been improving, any confidence in the marketplace from here on out will need to be supported by further job growth and overall economic growth.

Bottom Line: Major Indexes and Index ETFs like the SPDR S&P 500 ETF (NSYEARCA:SPY) and the SPDR Dow Jones Industrial Average ETF (NSYEARCA:DIA) dissed the GDP and Consumer Sentiment reports released today, as NYSEARCA:SPY and NYSEARCA:DIA have both fallen and will likely close in red.  The fourth quarter GDP report showed improved growth, however indicated that more growth is necessary as 2.8% is not much to write home about.  The Consumer Sentiment report showed a modest increase, but needs more growth as well if consumer confidence in the market and economy is to be sustained.  All in all, the US economy still has a long ways to go, even after this week’s impressive gains in the market.

Sign up for our free newsletter!

Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.