ETF Preview: ETFs, Futures Lower Ahead of ISM Nonmanufacturing Index, Factory Orders Data


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

SPDR S&P 500 ( SPY ): +0.73%

iShares S&P 500 ( IVV ): +0.69%

PowerShares QQQ ( QQQ ): +0.69%

iShares Russell 2000 ( IWM ): +0.89%

iShares Russell 1000 Growth ( IWF ): +0.72%

iShares MSCI Emerging Markets Index (EEM): +0.95%

United States Oil Fund (USO): +0.80%

SPDR Gold Shares (GLD): -0.32%

Select Financial Sector SPDRS (XLF): +0.81%

Tuesday's Pre-Market Movers

SPY, -0.46%

VXX, +2.85%

EEM, -0.85%

IWM, -0.51%

QQQ, -0.45%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV, were mostly lower in Tuesday's pre-market trading . Actively traded PowerShares QQQ ( QQQ ) was down 0.45%.

U.S. stock futures are lower ahead of the Institute for Supply Management's nonmanufacturing index report, as well as the report on factory orders from June - both due at 10 am ET.

Earnings continue to be in the spotlight, with American International Group (AIG), Office Depot (ODP) and Motorola Solutions (MSI) among the most active following their earnings reports. Target (TGT) was also slipping in pre-market trade after cutting its outlook.

Power Play: 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 also flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were unchanged after seeing losses in the previous session.

Motorola Solutions (MSI) was down after it reported weaker-than-expected fiscal Q2 results and forecast Q3 results well below Street expectations, even as the company reiterated its full-year outlook and boosted its cost-reduction target. Net earnings attributable to the company, excluding discontinued operations and one-time items, was $0.47 per diluted share in the latest quarter, down from $0.94 per share a year earlier and missing the profit of $0.63 per share expected on average by analysts polled by Capital IQ. Net sales slipped 6.9% to $1.39 billion, below the Street's consensus of $1.96 billion.

For Q3, the company projected a revenue decline of 7% to 9% from Q3 2013 and adjusted earnings from continuing operations of $0.35 to $0.41 per share. Analysts recently were looking for Q3 revenue growth of 0.3% to $2.12 billion and EPS of $1.02. For the full year, the company reiterated its expectations for a revenue decline in the low- to mid- single digits, excluding IDEN, with non-GAAP operating margins from continuing operations of approximately 18.5% of sales, consistent with its previous outlook. Analysts recently were projecting a 2014 revenue decline of 3.4% to $8.4 billion.

Winners and Losers


Select Financial Sector SPDRs (XLF) was down 0.49%; Direxion Daily Financial Bull 3X shares (FAS) was down 1.07%while its bearish counterpart, Direxion Daily Financial Bear 3X shares (FAZ) was up 0.77%.

W.P. Carey (WPC) shares were steady pre-market after it reported Q2 earnings of $0.38 per share and revenue of $205.2 million, the latter of which beat the Street view of $154 million, according to Capital IQ estimates.


Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were both flat.

Exterran Partners, L.P (EXLP), a natural gas company, reported Q2 earnings that beat the Street view while revenue was on par. Exterran reported net income of $17.8 million, or $0.26 per diluted limited partner unit. Revenue was $145.7 million compared to $125.5 million for Q2 2013. The Street expected earnings of $0.20 per share on $146 million in revenue, according to Capital IQ estimates. EXLP was steady in pre-market trade at $28.78.


Crude was down 0.14%; natural gas was down 0.16%. United States Oil Fund (USO) was down 0.36%; United States Natural Gas Fund (UNG) were down 0.19%.

Gold was down 0.02%, and silver was down 0.71%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.08% and iShares Silver Trust (SLV) was down 0.57%.


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

Retail ETFs SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR), and Market Vectors Retail ETF (RTH) were also unchanged.

Target (TGT) was down 4.78% after the retailer warned it now expects adjusted earnings below its prior guidance and Street expectations, and increased its estimate of costs related to its December 2013 data breach. The company said it now expects Q2 adjusted earnings per share "within a range around" $0.78, below its prior guidance of $0.85 to $1.00. Analysts recently were expecting $0.91 on average, according to Capital IQ.

The new guidance reflects expectations for U.S. same-store sales to be "essentially flat...with lower-than-expected EBITDA margin driven by promotional markdowns, as guests continue to spend cautiously and focus on value in the current environment," and for the Canadian segment to have "somewhat softer-than-expected sales combined with the impact of continued investments to clear excess inventory,: the company said.

GAAP EPS for Q2 is expected to be about $0.41 lower than the adjusted EPS--putting the company's estimate at about $0.37, versus the Street's estimate of $0.90. The guidance includes net pre-tax data breach expenses of $111 million, or $0.11 per share, and pretax early debt-retirement losses, recognized in interest expense, of $285 million, or $0.27 per share, in addition to other one-time items. The company said the Q2 gross expenses it expects from the data breach are now $148 million, partially offset by a $38 million insurance receivable.

Health Care

Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were unchanged. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 0.49%.

Regeneron Pharmaceuticals (REGN) shares were down 2.33% after it announced Q2 results that beat the Street view on earnings per share and total revenues and has reaffirmed full-year guidance of sales of its EYELEA product. The company has reported Q2 adjusted EPS of $2.47 per share, up from $1.73 in Q2 2013 and beating analyst estimates of $2.30. Total revenue of $665.70 was up from $457.64 million and topped analyst projections of $647.59 million.

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: SPY , IVV , QQQ , IWM , IWF

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