ETF Preview; Broad Market ETFs Gain, Financials Active, After ECB Announces Surprise Rate Cut


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

SPDR S&P 500 ( SPY ): -0.10%, with a new record high

iShares MSCI Emerging Markets Index ( EEM ): +1.19%, with a 3-year high

iShares Russell 2000 Index ( IWM ): +0.44%

PowerShares QQQ Trust, Series 1 ( QQQ ): -0.70%, touched a 14-year high

iShares FTSE/Xinhua China 25 Index ( FXI ): +3.07%, reached a 3-year high

Pre-Market Movers

RUSS +2%

FAS +1.8%

YINN +1.5%

RUSL -3%

FAZ -1.3%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were mostly higher pre-bell, and most were still near or hit record and multi-year highs. Actively traded PowerShares QQQ ( QQQ ) was up 0.23%. Financial sectors ETFs were among the most active after the European Central Bank unexpectedly cut interest rates. Russia-related bull fund RUSL was among the worse performing among ongoing tension with Ukraine, while Russia bear-focused fund RUSS was among the biggest gainers.

U.S. stock futures are pointing to a higher open after the European Central Bank unexpectedly cut interest rates to ward off the threat of inflation. The benchmark rate was lowered to 0.05 percent and the deposit rate is now minus 0.2 percent. The decision sent the euro lower, but stocks and bonds in the eurozone were trading higher. The U.K. also opted to keep its rates at the current record low levels.

Among U.S. economic data, ADP payrolls released at 8.15 ET Thursday increased 204,000, missing forecasts for 223,000 in August compared to 218,000 previously and relative to the 230,000 forecast for August nonfarm payrolls. Also out today, U.S. initial jobless claims for the week ended August 30 rose to 302,000 compared with forecasts for 300,000, while U.S. non-farm productivity just missed at 2.3% versus the consensus for a gain of 2.4%.

Power Play: Financial

Select Financial Sector SPDRs (XLF) was unchanged and hit a six-year high Wednesday. Direxion Daily Financial Bull 3X shares (FAS) was up 0.8% and hit a record Wednesday. Its bearish counterpart, FAZ, was down 1%.

Northstar Realty Finance (NRF) said late Wednesday it commenced an underwritten public offering of 45 million shares of common stock, of which a minimum of 22.5 million shares will be subject to the forward sale agreement. The underwriters are expected to be granted a 30-day option to purchase up to 6.75 million additional shares of common stock. The shares declined 2.5% pre-bell.

Winners and Losers


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 are inactive pre-market, but closed lower Wednesday after touching multi-year highs during the session. SPDR S&P International Technology Sector ETF (IPK) bucked the trend to end in the green, but was also flat pre-market.

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

Mitek Systems (MITK) shares soared in Thursday's pre-market session, after the provider of mobile-imaging software services for financial transactions late Wednesday said it and financial company USAA have agreed to settle all pending litigation between them.

MITK was up 77% at $4.20 in recent pre-market trading , in a 52-week range of $2.15 to $7.11.


Dow Jones U.S. Energy Fund (IYE) was flat; Energy Select Sector SPDR (XLE) was up 0.1%.

Chevron Phillips Chemical, equally owned by petroleum and chemical firm Chevron (CVX) and energy logistics company Phillips 66 (PSX), has signed an agreement to sell its Ryton polyphenylene sulfide (PPS) business to Solvay Specialty Polymers for $220 million. The transaction is expected to be completed in Q4 2014.

Included in the acquisition are Chevron Phillips' resin manufacturing assets in Borger, Texas, its pilot plant along with its PPS research and development assets in Bartlesville, Oklahoma, its compounding plant in Kallo-Beveren, Belgium, and certain intellectual properties.


Crude was down 0.6%; United States Oil Fund (USO) was down 0.3%. Natural gas was tipping higher, up 005% and United States Natural Gas Fund (UNG) was down 0.3%.

Gold was flat, while silver was up 0.2%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.15% and iShares Silver Trust (SLV) was down 0.22%.

Health Care

Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were flat and hit record highs Wednesday. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was lower Wednesday and unchanged so far pre-bell.

In company news, Johnson & Johnson (JNJ) said Thursday it will fast-track development of a promising new vaccine regime against Ebola in an effort to combat the current Ebola outbreak.

The company will work together with Denmark-based biotech company Bavarian Nordic and the National Institute of Allergy and Infectious Diseases. The parties plan to initiate human trials in early 2015.


Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were mixed Wednesday and unchanged pre-market. They remain near record or multi-year highs.

Mattress Firm Holding (MFRM), a mattress retailer, Thursday reported fiscal Q2 adjusted earnings above analysts' expectations and unveiled a deal to buy Sleep Train, a West Coast bedding retailer, for an aggregate purchase price of $425 million.

For the 13 weeks ended July 29, the company posted net income of $14.3 million, or $0.41 per diluted share, from $14.1 million, or $0.41 per diluted share, in the 13 weeks ended July 30, 2013. On an adjusted basis, it earned $0.61 per share in the latest period, up from $0.43 per share a year earlier and topping the $0.60 per share expected on average by analysts polled by Capital IQ.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: SPY , EEM , IWM , QQQ , FXI

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