Lack of Auto Bailout Sends ETFs to 5-Year Low

A day after the Dow Jones Industrial Average closed below the 8,000 level for the first time in five years, that benchmark headed lower once again Thursday during a skittish, up-and-down session. The Dow opened with a 200-plus-point drop, recovered that lost ground by lunch time and then headed back into negative territory by the final bell. The Dow ended the session down 445 points to hit a new low at 7,552.

The automobile industry once again weighed on trading. At midday there was speculation lawmakers in Washington had reached a compromise on an aid package for the Big Three car makers. But during a press conference at 2 p.m. political leaders said no such deal would materialize until Detroit came up with a viable plan on how they would get themselves back on track -- in other words, show us a plan and we'll show you the money. Evidently, there weren't enough votes to pass any bill even if Washington had gone forward with one.

At the same time Treasury Secretary Henry Paulson was giving a speech at the Reagan Library in California. Paulson walked through the crisis that has plagued the financial and stock markets the last year. He also made calls for more regulation that would prevent a similar situation from recurring. But like the folks on Capitol Hill, Paulson didn't give traders any news to get excited about.

Those two events were coupled with news from the corporate and economic fronts. The Department of Labor announced weekly jobless claims climbed to 542,000, marking a high not seen since the early 1990s. Citigroup (C) continued to see its stock slide. Traders have been bailing on the shares of the financial giant after it revealed more possible losses on its balance sheet due to troubled assets. Even a massive cost-cutting plan announced earlier this week couldn't convince investors. Things could get worse for the company. A wire service story pointed out that some institutions, funds and pension plans aren't allowed to own shares under $5 each.

Oil continued to pull back on concerns about the overall economy and its impact on demand for crude and gasoline. Oil finished the day down almost $5 a barrel to just under $50. It hadn't been below the $50 mark since 2005.

Bears won the day Thursday. The ProShares UltraShort Oil & Gas ETF (DUG) gained 18.6% and the ProShares UltraShort Financials (SKF) popped 16.7%.

Suntech Power Holdings (STP), a leading solar energy company, slashed its guidance due to the impact of the credit crisis and a weakening euro. That company news and the falling price of oil made for another tough day for solar ETFs. The Claymore/MAC Global Solar Energy (TAN) and the Market Vectors Solar Energy (KWT) ETFs decreased 19.3% and 15.1%, respectively.

Launching Pad
RevenueShares announced it began trading its ADR Fund ETF on Thursday. The fund will weight the companies in the S&P ADR index by revenue numbers. It will charge an annual expense ratio of 0.49%. Invesco PowerShares announced it began trading PowerShares Active U.S. Real Estate on the NYSE Arca exchange.

Earnings & Conference Calls
AnnTaylor, H.J. Heinz, J.M. Smucker

Economic Data
No major releases scheduled.

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