ETF Preview: ETFs, Stocks Slip Lower As U.S. Trade Deficit Narrows to Smallest Gap Since 2009, Misses Forecasts


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

SPDR S&P 500 ( SPY ): -0.21%

iShares S&P 500 ( IVV ): -0.17%

PowerShares QQQ ( QQQ ): +0.06%

iShares Russell 2000 ( IWM ): +0.33%

iShares Russell 1000 Growth ( IWF ): -0.08%

iShares MSCI Emerging Markets Index (EEM): -0.68%

United States Oil Fund (USO): -0.29%

SPDR Gold Shares (GLD): -0.53%

Select Financial Sector SPDRS (XLF): -0.14%

Pre-Market Most Active:

SPY, -0.16%

EEM, -0.38%

VXX, +0.50%

XLF, flat

EWJ, +0.26%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM, IVV and others, are lower. Actively traded PowerShares QQQ ( QQQ ) is down 0.05%.

U.S. stock futures weakened ahead of Tuesday's open following the report that the U.S. trade deficit declined in June by 22.4% to $34.2 billion - the smallest gap since fall 2009, but it missed the economists' estimates for a decline to $43 billion, according to a poll by Market Watch. The trade deficit is likely to lift the U.S.' growth estimates for the second quarter. Investors are being cautious as they continue to look for more clues on the Feceral Reserve's tapering on the bond buying program; Chicago Fed President Charles Evans' speech later today will be closely watched.

Winners and Losers

Financial -

Select Financial Sector SPDRs (XLF) is leaning lower. Direxion Daily Financial Bull 3X shares (FAS) is down 0.17%. Its bearish counterpart, FAZ, is up 0.33%.

Among financial stocks, Nationstar Mortgage Holdings Inc. (NSM) reported Q2 2013 adjusted earnings per share of $1.50 versus $0.85 in the same period last year. Revenues of $603.7 million grew 198% from $202.8 million in the second quarter of 2012. The Street view was $0.98 per share in earnings on revenue of $531 million. The company also reaffirmed its EPS guidance of $4.05 - $4.75 for the year 2013 and $6.45 - $7.50 for the year 2014. The Street is at $4.40 per share.

Technology -

Tech ETFs 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 leaning higher.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) look to open in the green.

SPDR S&P International Technology Sector ETF (IPK) is headed for a flat to higher open.

In sector news, Dish Network (DISH) is down 2.37% after it said Q2 sales were $3.61 billion, below the Thomson Reuters mean for $3.65 billion. It swung to a net loss of $0.02 per share, including a $438 million impairment of two of the three satellites acquired through the TerreStar and DBSD transactions.

Energy -

Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) are heading for a firmer start.

In sector news, McDermott International (MDR) is down 16.95% at a new 52-week low of $7.25 in the wake of the company's Q2 results reported late Monday. McDermott had a Q2 loss of $0.63, down from year ago income of $0.22 per share. Revenue was $647.3 million, down from $889 million last year and below forecasts for $740.4 million.

Commodities -

September crude is up 0.30%; September natural gas is up 0.72%. United States Oil Fund (USO) is up 0.48%. United States Natural Gas Fund (UNG) is up 0.17%.

December gold is down 1.13% and silver for September delivery is down 0.41%. Among rare metal funds, SPDR Gold Trust (GLD) is down 0.95%; iShares Silver Trust (SLV) is down 0.11%.

Healthcare -

Healthcare ETFs Health Care SPDR (XLV), Vanguard Health Care ETF (VHT), and iShares Dow Jones US Healthcare (IYH) are pointing to a negative start. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is also pointing lower.

In corporate news, Regeneron Pharmaceuticals Inc. (REGN) is down 3.02% after it reported Q2 2013 non-GAAP net income of $198 million, or $1.73 per diluted share, on revenues of $458 million. Analysts expected revenues of $473.2 million and GAAP earnings per share of $0.88, if comparable. In the same period last year, non-GAAP net income was $102 million, or $0.90 per diluted share, on revenues of $304 million.

Power Play -

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, American Eagle Outfitters (AEO) is down 15.37% after the company said late Monday that it is revising its Q2 EPS outlook to approximately $0.10, compared to EPS from continuing operations of $0.21 last year. The revised outlook is due to weaker than expected sales and margin results. Total net revenue decreased approximately 2% in the second quarter, while consolidated comparable sales, including AEO direct, decreased 7%. The lower outlook is less than half of the $0.21 Per Share the Street anticipated for Q2.

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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