Market Wrap-Up

It was a busy weekend: Friday saw an almost 200-point rise in the stock market; the Olympics came to a dramatic close; and we got our first vice presidential candidate in Delaware Sen. Joe Biden. But come Monday traders were confronted with business as usual. Financials led the broad market lower, as they have most of the summer, and those stocks helped erase the gains posted 72 hours earlier.

AIG, the insurance giant, was one of the main culprits. Investors and analysts continued to fret about the sophisticated instruments some mortgage-related that remain on its balance sheet. The shares were also dinged by a Credit Suisse report that outlined the extent of possible third quarter loses due to those instruments. Lehman Brothers lost ground once again. Reports on financial web sites and TV speculated that Chief Executive Richard Fuld may be on the chopping block (although if he is, our expert disagrees with such a move. Meanwhile, according to Bloomberg, it appeared KKR may be interested in buying Lehman's investment-management business. Lehman's shares lost 5.8%.

The price of oil bounced around the entire session as the dollar weakened and the early stages of a storm started brewing in the Caribbean. It closed up almost $1 per barrel to the $115 level.

There were a few bright spots. The National Association of Realtors released a report that showed sales of existing homes through July inched up 3.1% from the previous month a bigger move than expected. And Freddie Mac and Fannie Mae, usually the two stocks responsible for dragging down financials, rose Monday after seeing demand for Freddie notes during a weekly auction.

The Dow Jones Industrial Average lost 242 points to 11,386. Granted, the loss was recorded during a relatively light trading session.

Winners

It was a good day to be short the stock market. Of the 30 top-performing ETFs, 29 made bearish bets on the direction of the market. The ProShares UltraShort Russell 2000 Growth ETF gained 4.5%.

Losers

The general malaise surrounding financial ETFs continued to trickle down to other funds in that industry. The SPDR KBW Regional Banking ETF and the iShares Dow Jones U.S. Regional Banks lost 3.1% and 3.5%, respectively.

The SPDR KBW Insurance fund lost 1.7% on the back of AIG's downturn. (AIG's shares closed down 5.5%.)

Monday's Industry Headlines

Closing Time Index Universe is reporting that XShares Advisors is closing 15 of its HealthShares ETFs. The last trading day will be Sept. 19. The report also says the company will make dramatic changes to four other funds that will remain open. Earlier in the summer the company shuttered seven real estate-themed products.

Tuesday's Notebook

Earnings & Conference Calls
Tuesday: Applied Signal Technology, Borders, Chico's FAS, Corinthian Colleges, Daktronics, Hain Celestial, J. Crew, LTX, Smithfield Foods

Economic Data

Tuesday
7:45a.m. Chain Store Sales
8:55a.m. Retail Sales
10:00a.m. July New Home Sales
10:00a.m. August Conference Board Consumer Confidence
10:00a.m. August Richmond Fed Manufacturing Index

Quick Take

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