ETF Preview: Broad Market ETFs Head Lower as U.S. Government Enters Second Day of Shutdown


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Active broad-market exchange-traded funds in Tuesday's regular session:

SPDR S&P 500 ETF Trust ( SPY ): +0.79%

iShares MSCI Emerging Markets Index ( EEM ): +2%

Market Vectors Gold Miners ( GDX ): -2.4%

iPath S&P 500 VIX Short Term Futures TM ( VXX ): -3.5%

Select Sector SPDR Fund Financial ( XLF ) +0.7%

iShares Russell 2000 Index (IWM): +1%

Pre-market Movers

TVIX +2.5%

FAZ +1.24%

DXJ -1.2%

FAS -1.5%

IWM -0.5%

Broad Market Indicators

Most broad-market exchange-traded funds, including SPY, IWM, IVV and others, are weaker pre-market. Actively traded PowerShares QQQ (QQQ) is down 0.3% after hitting a new 52-week high of $79.72 on Tuesday.

U.S. stock futures are pointing to a lower open as the U.S. government enters its second day of shutdown, with no signs of an imminent breakthrough in the stalemate over the budget. Adding to the weak sentiment is an ADP jobs report this morning showing U.S. private employers added 166,000 jobs in September, lower than economists' expectations for the month.

Winners and Losers

Financial -

Select Financial Sector SPDRs ( XLF ) is leaning slightly higher. Direxion Daily Financial Bull 3X shares (FAS) down 1.5%. Its bearish counterpart, FAZ, was up 1.2%.

Among financial stocks, Empire State Realty Trust (ESRT) said it has priced its initial public offering of 71.5 million shares at $13.00 per share. Underwriters have a 30-day option to buy an additional 10,725,000 shares. The stock will be listed on the New York Stock Exchange under the symbol ESRT. The offering will close on Oct. 7. Net proceeds are expected to be approximately $754.4 million.

Technology -

Technology Select Sector SPDR ETF (XLK) was flat after a firmer session Tuesday. Among other tech ETFs - 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 all unchanged after rising yesterday.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) is flat after rising close to a 52-week high Tuesday. Semiconductor Sector Index Fund (SOXX) and SPDR S&P International Technology Sector ETF (IPK) are also both unchanged.

In sector news, BlackBerry Ltd. (BBRY, BB.TO) is looking at options to unlock value from its real estate portfolio in its hometown of Waterloo, Ontario, Canada's Globe and Mail newspaper reports. The smartphone maker owns more than 20 buildings in the area. This comes as multiple media reports cite financial documents filed with regulators by Blackberry that say it expects to book US$400 million in charges before the end of May 2014, around four times the previous estimate for fiscal 2014. The shares are down 1% pre-market.

Energy -

Dow Jones U.S. Energy Fund (IYE) is quiet and Energy Select Sector SPDR (XLE) is down about 0.55%.

In sector news, PowerSecure International (POWR) said it has been awarded approximately $25 million of new business, including about $10 million from new company-owned distributed generation projects. In total, the new business awards include approximately $12 million of distributed generation business, $10 million of additional utility infrastructure business, and approximately $3 million in new energy efficiency sales.

Commodities -

Crude edging into the red, and United States Oil Fund (USO) is flat. Natural gas is up 0.08% and United States Natural Gas Fund (UNG) is quiet.

Gold was up 0.6% and SPDR Gold Trust (GLD) is also heading higher, up 3%. Silver has gained 0.4% and iShares Silver Trust (SLV) is up 0.34%.

Healthcare -

Health Care SPDR (XLV) is inching higher, up 0.04%. Other healthcare ETFs, Vanguard Health Care ETF (VHT), and iShares Dow Jones US Healthcare (IYH) are so far flat after strong gains Tuesday. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is down 0.36% after touching a new 52-week high of $213.78 yesterday.

In corporate news, Delcath Systems (DCTH) is higher after disclosing the FDA granted the company orphan drug designation for melphalan in the treatment of patients with hepatocellular carcinoma (HCC, or primary liver cancer). The shares are up 42% at $0.44, a 52-week high.

Consumer -

Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK) and Vanguard Consumer Staples ETF (VDC) are all unchanged after modest gains Tuesday.

In sector news, FBR Capital analysts have initiated coverage of apparel retailer Abercrombie & Fitch Co. (ANF) with an Outperform rating. The firm has set its price target on the stock at $43 a share. In the pre-market session, ANF is flat at $35.91, in the low end of a 52-week range of $30.06 - $55.23.

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

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

This article appears in: Investing Commodities
Referenced Stocks: EEM , GDX , SPY , VXX , XLF

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