ETFs Fall on Earnings, Economic Data

A week of intermittent market rallies fizzled Thursday as Starbucks (SBUX) joined the ranks of companies whose expansion plans are running out of steam amid the ongoing recession. The Seattle-based firm said it would curb the pace of new store openings and shutter unproductive outlets, a negative indicator that was only the tip of market troubles. A drop in economic activity also hurt Dryships (DRYS), the ocean tanker company. It suspended its fourth-quarter dividend and announced big cuts to its capital spending for the year. In addition, discount brokerage Charles Schwab (SCHW) announced layoffs and cost cuts as its shares plunged.

Halfway across the globe the World Economic Forum in Davos, Switzerland, began its second day of panel discussions. The headlines playing out here were on the minds of many speakers at the weeklong event. Jamie Dimon, CEO of JPMorgan Chase (JPM), felt compelled to reassure investors that the bank had adequate capital, and said talk of nationalizing banks was hobbling the financial-services sector.

Meanwhile, the Department of Labor announced weekly jobless claims rose faster than expected to 4.78 million. New home sales hit a new low for December, dropping to 331,000.

On Wednesday night, the House approved an $819 billion economic stimulus package. It now heads to the Senate, where a smaller Democratic majority guarantees political haggling over its finished form.

The Dow Jones Industrial Average closed down 226 points at 8,149.

Oil closed down 69 cents at $41.47.

A flight from equities proved a boost to metals funds. The Market Vectors Gold Miners fund (GDX) rose 5% as gold rose to $908.70 an ounce. IShares Silver (SLV) climbed 3.4% as silver rose to $12.36 an ounce.

Financials and insurance ETFs took the heaviest losses. ProShares Ultra Financials (UYG), a fund designed to be bullish on financials, lost 14.1%. The SPDR KBW Insurance (KIE) fund closed down 8.9% and the KBW Bank ETF (KBE) shed 8.8%.

Earnings
Chevron, ExxonMobil, Gannett, Honda Motor, Honeywell, Procter & Gamble

Economic Data
8:30 a.m. 4Q Advance GDP
8:30 a.m. 4Q Employment Cost Index
9:45 a.m. Jan. Chicago PMI
10:00 a.m. End-Jan. Reuters/Univ. of Michigan Sentiment Index

A look at how the industry's most popular ETFs did on Thursday.