ETF Preview: ETFs Mixed, Futures Look to Open in the Green as Strong Earnings, M&A News Lift Sentiment


Active broad-market exchange-traded funds in Friday's pre-market trading :

SPDR S&P 500 ETF Trust ( SPY ): +0.24%

iPath S&P 500 VIX ST Futures ETN ( VXX ): -3.01%

iShares MSCI Emerging Index Fund ( EEM ): +1.36%

iShares Russell 2000 Index Fund ( IWM ): +0.04%

Market Vectors Gold Miners ETF ( GDX ): +0.04%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV, were mixed in Friday's pre-market trading. Actively traded PowerShares QQQ (QQQ) was up 0.43%.

Meanwhile, U.S. stock futures are looking to open higher, recovering from Thursday's sharp losses which were spurred by renewed tensions on the Ukraine and Russian border following the downing of a Malaysian airlines passenger jet. Earnings news were in focus, with General Electric (GE) reporting as-expected Q2 results, while M&A news - particularly, the AbbVie (ABBV) and Shire (SHPG) deal for a $54.8 billion merger - were also helping lift market sentiment.

Still ahead, the University of Michigan preliminary consumer sentiment index for July will be reported at 9:55 am ET, while the Conference Board's index of leading indicators for June will be released at 10 am ET.

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.

RealPage (RP) tumbled nearly 25% after it announced preliminary non-GAAP total revenue and adjusted EBITDA results for Q2, with revised guidance based on lower-than-expected revenue from products and services related to leasing activity. The property management solutions provider expects non-GAAP total revenue of $93.8 million to $94.8 million for the quarter and adjusted EBITDA of $11.5 million to $12.5 million. Analysts had predicted total revenue of $107.19 million for the quarter and EBITDA of $25 million.

Winners and Losers


Select Financial Sector SPDRs (XLF) was flat; Direxion Daily Financial Bull 3X shares (FAS) was up 1.05% while Direxion Daily Financial Bear 3X shares (FAZ) was down 0.84%.

Bank Of New York Mellon (BK) was down 0.26% after it reported Q2 EPS of $0.62 per diluted common share, up from $0.60 in Q2 2013 and beating analyst estimates of $0.56. Total revenue of $3.72 billion was down from $3.80 billion in Q2 2013 and missed analyst projections of $3.77 billion.


Dow Jones U.S. Energy Fund (IYE) was flat while Energy Select Sector SPDR (XLE) was down 0.22%.

Key Energy Services (KEG) was down 11.47% after it said it expects to report a Q2 loss on lower consolidated revenue as production-driven businesses outside of California did not see sufficient activity increases to offset lower activity in California. The onshore rig-based well servicing contractor said it expects to report a loss between $0.14 to $0.15 per share, excluding goodwill and asset impairments, compared to the breakeven expected by analysts polled by Capital IQ. Including $30 million to $35 million in estimated goodwill and other assets impairments pre-tax charges related to its operations in Russia the loss is expected to be between $0.35 and $0.38.

Meanwhile, Key Energy said that in Q2 it has incurred pre-tax expenses of approximately $5 million in connection with the previously disclosed Foreign Corrupt Practices Act investigations; redeployment and make-ready pre-tax costs of approximately $2 million in association with the previously disclosed movement of rigs from Mexico to the U.S.; and pre-tax severance costs of approximately $1 million, in association with headcount reductions, primarily in Mexico.


Crude was down 0.16%; United States Oil Fund (USO) was up 0.21%. Natural gas was up 0.03% and United States Natural Gas Fund (UNG) was down 0.32%.

Gold was down 0.58%, and silver was down 0.87%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.88% and iShares Silver Trust (SLV) was down 1.13%.

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 up 0.74%.

Regeneron Pharmaceuticals (REGN) said that in the Phase 3 VIVID-DME trial of EYLEA injection for the treatment of diabetic macular edema participants showed a sustained improvement from baseline in best-corrected visual acuity, the primary endpoint, at week 100, compared to laser photocoagulation.


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

Johnson Controls (JCI), which provides thermostat technology, reported Q3 earnings beat the Street view, while revenue met expectations. Johnson Controls had earnings of $0.84 per share and Q3 revenue of $10.8 billion, versus the Street view of $0.83 per share and $10.8 billion in revenue according to Capital IQ estimates. JCI shares were down 1.76%.

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: SPY , VXX , EEM , IWM , GDX

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