ETF Preview: Euro Zone Debt Concerns Weigh on Broad-Market ETFs - SPY Down 0.5%


SPDR S&P 500 ( SPY ): -0.5%

Financial Select Sector SPDR ( XLF ): -0.6%

Direxion Daily Financial Bull 3X Shares ( FAS ): -2.0%

iShares Russell 2000 Index ( IWM ): -0.4%

iShares MSCI Emerging Markets Index ( EEM ): -1.1%

Pre-Market ETF Most Actives:

SPY, -0.5%

QQQ, -0.2%

FAS, -2.1%

GLD, -1.2%

SDS, +0.9%

Winners and Losers

Broad ETFs are trading lower with QQQ, SPY and EEM all moving to the downside in pre-bell trading as index futures tipped lower as concerns over the eurozone debt crisis again took center stage.

Investors were awaiting a vote by Slovakia on broadening the euro zone rescue fund. Greece's bondholders may see as much as 60% of their holdings in Greek debt written off as a loss, according to an interview of the head of the eurozone finance ministers, cited by a Reuters report.

Financial ETFs

Financial ETFs are mixed in the early going with the Financial Select Sector SPDR ( XLF ) gaining 0.1% and the Direxion Daily Financial Bull 3X Shares ( FAS ) - one of yesterday's leading gainers - is slipping 2.5%. China's four largest state-controlled banks saw their market values jump after the investment arm of the Chinese government accumulated shares, MarketWatch notes. The move has analysts concerned about how long those gains would last, the report said. Here at home financial shares are moving to the downside, with BAC down 1.5%, C down 1.1%, WFC down 0.2% and JPM down 0.6%.

The ishares Barclays 20+ Year Treasury Bond Fund (TLT), an ETF that tracks U.S. Treasuries, is edging higher in early pre-market trade, an indication Treasuries could see a lift after the bond market was closed for a holiday on Monday. The TLT is up between 116.71 and 116.98 after closing at 116.57. The ProShares Ultrashort 20+ Year Treasury (TBT), which moves in an inverse manner to the TLT, is down this morning at 20.51. It closed Monday at 20.66.

Health care -

Health care ETFs are getting some support in pre-market trading, with the Vanguard Health Care ETF (VHT) gaining 0.2% while the Pharmaceutical HOLDR (PPH) getting some fractional upside support. PDL BioPharma (PDLI) was downgraded to Sector Perform from Outperform at RBC Capital based on valuation. The firm set a price target of $6. Also, Biostar Pharmaceuticals (BSPM) was halted in the pre-market session after it said its wholly owned subsidiary, Shaanxi Aoxing Pharmaceutical, Ltd., entered into a Share Transfer Agreement to acquire Shaanxi Weinan Huaren Pharmaceuticals, Ltd. for $9.62 million.

Technology -

Technology ETFs are trending higher with the Technology SPDR (XLK) moving up 0.1% in pre-market trading While the Semiconductor HOLDRs (SMH) is just firm. Shares of Apple (AAPL) are adding to yesterday's gains, moving up 1%. . The company announced said its 4S iPhone exceeded the first-day pre-orders for the previous best selling iPhone 4. The new phone has a faster processor and new software features. Pre-orders exceeded 1 million phones, well ahead of the previous record sale of 600,000 iPhone 4's in a single day.

Commodities and Mining -

Commodities - particularly oil ETFs - could see reduced interest today as The Organization for Petroleum Exporting countries continued to trim its outlook for global demand for the rest of this year and next year. OPEC cut the global demand growth forecast this year by 180,000 barrels of oil a day citing weakness in the world economy. For next year, global demand growth forecast was revised down by 70,000 barrels per day. The United States Oil Fund (USO) is trading down 0.93% while the United States Natural Gas Fund (UNG) is up 0.2%.

Commodity metal ETFs are slipping lower in the early going, with SPDR Gold Shares (GLD) is down 0.92%. Market Vectors Gold Miners (GDX) is down 0.69%. iShares Silver Trust (SLV) is down 1.8%.

Power Play -

ETFs encompassing basic materials could get some attention today ahead of earnings from Alcoa (AA), which are due after the market close. So far AA is down 0.3% ahead of the open. Analysts polled by Thomson Reuters expect the aluminum giant to report a profit of $0.22 per share on revenue of $6.22 billion. Watch funds like iShares Dow Jones U.S. Basic Materials ETF (IYM) and the WisdomTree International Basic Materials ETF (CCXE), both of which are flat to lower in pre-market trade.

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: EEM , FAS , IWM , SPY , XLF

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