ETF Preview: ETFs, Futures Lower Ahead of Fed Speakers

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Active broad-market exchange-traded funds at the close of Friday's regular session:

SPDR S&P 500 ( SPY ): +0.49%

iShares S&P 500 ( IVV ): +0.51%

PowerShares QQQ ( QQQ ): +0.57%

iShares Russell 2000 ( IWM ): +0.96%

iShares Russell 1000 Growth ( IWF ): +0.10%

iShares MSCI Emerging Markets Index (EEM): +1.00%

United States Oil Fund (USO): +0.16%

SPDR Gold Shares (GLD): -0.04%

Select Financial Sector SPDRS (XLF): +0.66%

Pre-Market Movers

SPY, -0.04%

IWM, +0.10%

EEM, +0.05%

VXX, -0.36%

XLF, -0.41%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were edging lower pre-market Monday. Actively traded PowerShares QQQ ( QQQ ) was down 0.01%.

U.S. stock futures edged lower in Monday's pre-market trading , ahead of a trading session with little economic data on tap. Merger and acquisition news was in the spotlight, with Tyson Foods' (TSN) $8.55 billion bid for Hillshire Brands (HSH), and Merck's (MRK) plan to acquire Idenix Pharmaceuticals (IDIX) for $3.85 billion. Investors are looking forward to two Federal Reserve speakers - St. Louis Fed President James Bullard will speak at 9:10 am ET while Boston Fed President Eric Rosengren will be giving a speech at 1:30 pm ET. Much of the week will also be thin on economic data, but the government's report on May retail sales, which will be released on Thursday, will be in focus.

Power Play: Consumer

Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were also flat.

Among stocks, Tyson Foods (TSN) shares edged lower pre-bell after as it said it has submitted a binding offer to buy Hillshire Brands (HSH) for $8.55 billion in cash, sending the maker of food products to an all-time high before the market open. TSN was down 2.47% while HSH climbed 5% to an all-time high.

The offer is subject to Hillshire Brands being released from its existing agreement to buy Pinnacle Foods (PF). PF closed down 0.9% on Friday and is trading in the upper half of the 52-week range between $23.56 and $35.67. It was unchanged in recent pre-market trade. The deal, which includes Hillshire's outstanding net debt, represents a multiple of 16.7x trailing 12 months adjusted EBITDA or 10.5x including $300 million in synergies. Tyson said it expects that the proposed transaction to be marginally accretive to EPS on a cash basis in the first full fiscal year after completion and substantially accretive thereafter.

Winners and Losers

Technology

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) were inactive. SPDR S&P International Technology Sector ETF (IPK) was unchanged and reached a record high in the previous session.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were unchanged.

In corporate news, Analog Devices (ADI) inked a deal to buy Hittite Microwave Corp. (HITT) for $78 per share cash, reflecting a total enterprise value of $2 billion. The transaction is expected to add to ADI's non-GAAP EPS. ADI also reaffirmed its Q3 outlook for a revenue increase of 1% to 5% and EPS in the range of $0.60 to $0.64 per share. The analyst consensus is $0.63 per share, according to Capital IQ. ADI shares closed at $52.96; HITT shares climbed 28% and are on track to reach a new 52-week high.

Financial

Select Financial Sector SPDRs (XLF) was flat. Direxion Daily Financial Bull 3X shares (FAS) was up 0.11%. Its bearish counterpart, FAZ, was down 0.11%.

Among sector news, AIG (AIG) has launched a service to sell auto insurance directly to customers in Dubai. The AIG Auto Insurance is sold through the global insurance company's licensed entity, American Home Assurance Company, in the UAE and include products such as compulsory auto insurance, collision and theft insurance, and voluntary third-party liability insurance.

Energy

Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were flat, but reached record highs in the previous session.

Among stocks, Ferrellgas Partners (FGP) reported earnings in the quarter ended April 30 rose slightly to $44.9 million or $0.57 per share from $44.2 million or $0.56 the year earlier, missing the average $0.64 estimate from analysts polled by Capital IQ. Revenue rose to $722.1 million from $603 million, short of the $749 million consensus estimate. The company said it now expects fiscal 2014 adjusted ebitda between $285 million and $290 million, up from previously $275 million to $285 million.

Commodities

Crude was edging higher, up 0.81%; United States Oil Fund (USO) was up 0.74%. Natural gas was down 0.36% and United States Natural Gas Fund (UNG) was down 0.69%.

Gold was leaning higher, up 0.30%, and silver was up 0.86%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.16% and iShares Silver Trust (SLV) was up 0.55%.

Health Care

Health Care SPDR (XLV) iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) are unchanged and all closed higher on Friday. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) ended down and is inactive pre-market.

In corporate news, Merck (MRK) said it plans to buy Idenix Pharmaceuticals (IDIX) in a $3.85 billion deal.

IDIX shares were up 235.68% , well past their 52-week high of $9.32. MRK was down 0.61%.



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 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities

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

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