Tight Trading Range Leaves ETFs Flat

Stocks lost steam at the end of Wednesday’s trading, despite a report that private-sector job losses for August were worse than expected and factory orders were short of estimates.

Most unleveraged exchange-traded funds stayed flat, though real estate funds sold off on concerns about the commercial real estate sector. A rise in the Shanghai Composite stock index put China funds back in favor, and an increase in gold prices gave the metals funds a boost.

The Dow Jones Industrial Average lost 30 points to close at 9280. The Nasdaq shed 2 points to finish at 1967, and the S&P 500 dropped 3 to end at 995.

A report from Automatic Data Processing and Macroeconomic Advisors said the U.S. private sector shed 298,000 jobs in August, higher than the 213,000 job losses that economists were expecting. The report is a closely watched precursor to the monthly U.S. employment report due out on Friday. The national unemployment rate is expected to rise again to 9.5% after dipping to 9.4% in July.

In other economic news, the Labor Department reported that nonfarm business productivity rose at a 6.6% annual rate in the second quarter, its biggest increase in nearly six years. Factory orders rose 1.3% in July, according to the Commerce Department. That's less than economists' consensus estimate of 2.0%.

The afternoon release of the minutes of the August meeting of the Federal Reserve Open Markets Committee, which sets monetary policy, showed the central bank was confident the worst of the downturn was over, but offered little in the way of policy or rate changes.

For a detailed rundown on Wednesday’s trading session see our market story. 

The iShares MSCI Taiwan Index fund (EWT) rose 2.6% as investors gained confidence in the region's economic recovery. Gold's rise to $924 an ounce pushed shares of the SPDR Gold Shares (GLD) 2.4% higher.

Shares of the iShares Dow Jones U.S. Real Estate Index fund (IYR) slid 2.0% as the prospect of commercial real estate defaults discouraged investors. The Regional Bank HOLDRS (RKH) fund shed 1.8% on continuing worries about a possible wave of smaller bank failures.

Launching Pad
Canadian insurer Manulife Financial (MFC) filed a request with the Securities & Exchange Commission to get permission to issue exchange-traded funds. Manulife subsidiaries John Hancock Advisers, John Hancock Investment Management Services and MFC Global Investment Management would each advise at least one of the funds Manulife seeks to launch. The filing said the funds would be based on existing stock indexes but offered no further details.

The asset management arm of Jefferies Group (JEF) sought permission from the Securities and Exchange Commission to get the necessary exemptions that would allow the investment bank to launch exchange-traded funds. It plans a domestic equity fund and a domestic fixed income fund, and plans more fund launches after those begin trading.

Earnings and Conference Calls
ArcSight, Avago Technologies, Cascade, Ciena, Cooper, Del Monte Foods, Esterline Technologies, G-III Apparel Group, Global Crossing, Jackson Hewitt Tax Service, Krispy Kreme Doughnut, Movado

Economic Data
8:30 a.m. Jobless Claims
9:00 a.m. RBC CASH Index
10:00 a.m. ISM Non-Manufacturing Index
10:30 a.m. EIA Natural Gas Report
4:30 p.m. Fed Balance Sheet
4:30 p.m. Money Supply