Mid-Day ETF Update: ETFs, Stocks Sink as Weak Housing Data Undermine Gains from Upbeat CPI

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

iShares MSCI Emerging Markets Index ( EEM ): -2.61%

SPDR S&P 500 ( SPY ): -0.64%

Select Financial Sector SPDRs ( XLF ): -0.33%

iShares Russell 2000 Index ( IWM ): -1.59%

PowerShares QQQ Trust, Series 1 ( QQQ ): -1.63%

Broad Market Indicators

Most broad-market exchange-traded funds, including SPY, IWM, and IVV, have tumbled. Actively traded PowerShares QQQ ( QQQ ) was down 1.63%.

U.S. stocks reversed and were in negative territory in the session's half, as weak housing data overshadowed earlier upbeat news on better-than-expected CPI numbers. The National Association of Home Builders and Wells Fargo reported that builder confidence in the market for newly built, single-family homes was at 47, up slightly from the prior month, but falling short of forecasts. The New York Fed also had downbeat data, saying that the Empire State index edged lower in April, to a reading of 1.3 from 5.6 in March, and missed forecasts of an increase to 8.0. Earlier gains were spurred by a 0.2% rise in consumer prices over the prior month, topping forecasts; core CPI, which excludes food and energy costs, also rose 0.2%.

Power Play: Energy

Energy funds and stocks were outperforming most of the broader market. Dow Jones U.S. Energy Fund (IYE) was up 0.23% and Energy Select Sector SPDR (XLE) was up 0.31%.

Among stocks, FX Energy (FXEN) surged more than 18% after the company reported favorable gas results from its Tuchola-4K well in Poland. The company said the 4K well reached its primary objective, the lower Zechstein Ca1 formation at 2,740 meters, approximately 60 meters high to last year's Tuchola-3K well. The well has been cored and drilled to 2,810 meters, with strong gas shows observed throughout, FX Energy said, including components up to C2 ethane and C3 propane with good porosity.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was down 0.33%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.01%. Its bearish counterpart, FAZ, was up 1.01%.

Among financial stocks, Westamerica Bancorporation (WABC) was down 1.2% after the parent company of Westamerica Bank reported Q1 EPS in line with analysts' expectations. Westamerica reported Q1 diluted EPS of $0.58 on net income of $15.3 million, compared to $0.64 and $17.3 million in the year-ago period. The Capital IQ consensus was for EPS of $0.58.

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 in the red. SPDR S&P International Technology Sector ETF (IPK) was down 0.78%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were lower as well.

In corporate news, China Information Technology (CNIT) was up more than 15% after the company reported that for the second half, revenue declined 31.6% to $38.9 million, while the company had an adjusted loss of $5.9 million, or $0.21 per share, narrowing from a loss of $13.5 million, or $0.21 a share a year earlier. For FY13, CNIT reported a revenue decrease of 11.9% to $76.1 million compared to FY12. An adjusted net loss of $11.2 million for FY13 resulted in adjusted fully diluted net loss per share of $0.41 per share. FY13 cash flow from operations decreased 22.8% to a cash outflow of $11.4 million. CNIT projects FY14 to produce total revenue of $100 - $120 million and adjusted net income in the range of $6 - $8 million, excluding certain items. Looking into 2015 and 2016 CNIT expects to achieve 50% adjusted net income growth.

Commodities

Crude was down 0.37%; United States Oil Fund (USO) was up 0.11%. Natural gas was up 0.20% while United States Natural Gas Fund (UNG) was up 0.16%.

Gold was up 0.57% while silver was up 0.20%. Among rare metal funds, SPDR Gold Trust (GLD) was down 1.83% and iShares Silver Trust (SLV) was down 2.19%.

Consumer

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

Among stocks, Safeway (SWY) was down 10% after it said late Monday that it finalized the spinoff of its remaining stake in Blackhawk Networks Holdings (HAWK, HAWKB). SWY completed the distribution to its stockholders of 37,838,709 shares of Class B common stock of Blackhawk Networks Holdings, which represented a stake of about 72.2% in the business. SWY no longer owns any of Blackhawk's Class B common stock following this distribution.

Health Care

Health Care SPDR (XLV) and iShares Dow Jones US Healthcare (IYH) edged higher, while Vanguard Health Care ETF (VHT) were lower. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 2.01%.

In corporate news, Mylan (MYL) was down more than 2% after the company said Tuesday that it and its partner Famy Care Ltd. have signed a settlement and license agreement with Warner Chilcott Company, LLC over their generic contraceptive pill. The accord settles the parties' litigation in connection with MYL's filing of an Abbreviated New Drug Application (ANDA) with the U.S. Food and Drug Administration (FDA) for Norethindrone and Ethinyl Estradiol Chewable Tablets 0.8 mg/0.025 mg and Ferrous Fumarate Chewable Tablets, a generic version of Generess Fe Tablets, which are indicated for the prevention of pregnancy. Separately, MYL said it has launched Eszopiclone Tablets 1 mg, 2 mg and 3 mg, the generic version of Sunovion Pharmaceuticals Inc.'s Lunesta. MYL received final approval from the FDA for its ANDA for this product, which is indicated for the treatment of insomnia.



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 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities

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

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