ETF Preview: Broad Market ETFs, Futures Firm Following Yellen Remarks, Upbeat Japanese GDP Report


Active broad-market exchange-traded funds at the end of Wednesday's session:

SPDR S&P 500 ( SPY ): +0.77%

iShares S&P 500 ( IVV ): +0.78%

PowerShares QQQ ( QQQ ): +1.21%

iShares Russell 2000 ( IWM ): +0.95%

iShares Russell 1000 Growth ( IWF ): +0.98%

iShares MSCI Emerging Markets Index (EEM): +0.20%

United States Oil Fund (USO): +0.74%

SPDR Gold Shares (GLD): +0.33%

Select Financial Sector SPDRS (XLF): +0.87%

Pre-Market Most Active:

SPY, +0.19%

EEM, +0.32%

XLF, +0.10%

IWM, +0.12%

QQQ, -0.31%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM, IVV and others, are firmer. Actively traded PowerShares QQQ ( QQQ ) is down 0.31%.

U.S. stock futures are pointing to a firmer start on Thursday's regular session as Janet Yellen's comments on the Federal Reserve's bond buying program, ahead of her confirmation hearing, brightened market sentiment. In her prepared remarks, released in Wednesday's after hours, Yellen said that the Federal Reserve's asset purchase program was the best way to ensure the U.S. economy's recovery. Economic news from abroad also added to the optimism - as Japan reported that its GDP expanded at an annualized rate of 1.9% in the third quarter, topping economists' forecasts.

Power Play: Technology

Technology ETFs and stocks look to open in the red, tracking Cisco (CSCO) after the Internet protocol (IP)-based networking company provided downbeat guidance late Wednesday. Technology Select Sector SPDR ETF (XLK), iShares Dow Jones US Technology ETF (IYW), iShares S&P North American Technology ETF (IGM) and iShares S&P North American Technology-Software Index (IGV) are flat after logging losses in Wednesday's after hours session.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) and SPDR S&P International Technology Sector ETF (IPK) are headed for a lower open.

In sector news, Cisco Systems (CSCO) continues to decline, and is down more than 11% in pre-market trading after the company provided fiscal Q2 and 2014 guidance that was well below analyst estimates. Management guided FQ2 revenue down 8% - 10% year-over-year and earnings of $0.45 - $0.47 (versus consensus of $0.52). The company also introduced FY14 earnings of $1.95 - $2.05, well below the average consensus estimate of $2.11. CSCO reported Q1 EPS of $0.53, vs. the analyst consensus of $0.51 per share on Capital IQ. Revenue was $12.1 billion, vs. expectations of $12.34 billion.

Winners and Losers

Financial -

Select Financial Sector SPDRs (XLF) is up 0.29%. Direxion Daily Financial Bull 3X shares (FAS) is up 0.66%. Its bearish counterpart, FAZ, is down 0.55%.

Among financial stocks, IFM Investments Limited (CTC) reported Q3 non-GAAP net loss widened to RMB17.9 million (US$2.9 million) from RMB6.3 million a year ago. The non-GAAP diluted net loss per ADS in the third quarter of 2013 was US$0.20. Consolidated net revenue rose 6.5% to RMB202.9 million (US$33.2 million), short of estimates for $37 million on Capital IQ. The company currently estimates that its total net revenue for the fourth quarter of 2013 will be in the range of RMB210 million to RMB220 million. ($34.46 to $36.1 million), short of estimates for $39.8 million.

Energy -

Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were flat, after seeing gains in Wednesday's after hours.

In sector news, SolarCity (SCTY) is up 6% after it priced an offering by its wholly-owned subsidiary, SolarCity LMC Series I, LLC, of $54,425,000 aggregate principal amount of Solar Asset Backed Notes, Series 2013-1. The notes were priced on November 13, 2013 and were offered only to persons who are both qualified institutional buyers as defined in Rule 144A. The sale of the notes is expected to close on November 21, 2013, subject to customary closing conditions.

Commodities -

December crude is down 0.24%; natural gas for January delivery is down 1.24%. United States Oil Fund (USO) is down 1.21%, and United States Natural Gas Fund (UNG) is down 1.41%.

Gold and silver for December delivery are higher, up 0.77% and 1.26%, respectively. Among rare metal funds, SPDR Gold Trust (GLD) is up 0.59%; iShares Silver Trust (SLV) is up 1.11%.

Consumer -

Consumer ETFs Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) are pointing to a higher start.

In sector news, Kohl's Corporation (KSS) is down nearly 10% after it said its Q3 earnings fell to $0.81 per share from $0.91 the year earlier, missing the $0.86 average Capital IQ analyst estimate. Revenues fell by 1% to $4.44 billion, also short of the $4.5 billion consensus. The department store company also cut its annual EPS guidance to between $4.08 and $4.23, just barely touching the analyst estimate of $4.23. Kohl's previous guidance range was $4.15 - $4.35. For the fiscal quarter ending Feb.1, the company expects EPS of $1.59 to $1.74 per share, straddling the $1.68 average analyst estimate. The guidance is based on total sales to decline between 2% and 4% and comparable store sales declines of between 0% and 2%.


Health Care SPDR (XLV), Vanguard Health Care ETF (VHT), and iShares Dow Jones US Healthcare (IYH) are pointing to a firmer start after touching fresh new highs in the previous session. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is also pointing higher.

In sector news, Novavax (NVAX) is higher this morning, up 8.25%, after it saw data on its H7N9 Avian flue vaccine published in the New England Journal of Medicine. The report notes the study recorded that the dose-sparing formulation showed significant potential utility in the event of a pandemic and protective levels were achieved from vaccinations within 116 days of the announced outbreak of novel lethal H7N9 virus.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: IVV , IWF , IWM , QQQ , SPY

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