Mid-Day ETF Update: ETFs, Stocks Slump, Set to End Week Lower as Geopolitical Concerns, Mixed Economic Data Continue to Weigh

By MidnightTrader.com Staff,

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

SPDR S&P 500 ( SPY ): -0.58%

iShares MSCI Emerging Markets Index ( EEM ): -0.10%

iPath S&P 500 VIX ST Futures ETN ( VXX ): +6.07%

PowerShares QQQ Trust, Series 1 ( QQQ ): -0.73%

iShares Russell 2000 Index ( IWM ): -0.83%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were mostly lower at the session's half. Actively traded PowerShares QQQ ( QQQ ) was down 0.73%.

U.S. stocks slipped further into the negative territory and are set to end the week lower as investors digested a slew of mixed data, while geopolitical tensions in Ukraine and ongoing violence in Gaza continued to weigh on market sentiment. Earlier losses were spurred by the weaker-than-expected gains in non-farm payrolls for July and consumer spending for May.

In economic data, construction spending plunged 1.8% in June, missing estimates; May's construction spending,on the other hand, was revised upward to a 0.8% gain. Also missing Wall Street expectations, the final University of Michigan/Thomson Reuters consumer sentiment index was 81.8, down from the initial reading of 82.5. Meanwhile, Markit's U.S. manufacturing PMI reading for July fell to 55.8 for the final July reading versus June's 57.3 and the 56.3 preliminary print for last month. Finally, July ISM manufacturing jumped to 57.1 after slipping 0.1 point to 55.3 in June - the highest in three years, and beating forecasts.

Power Play: Health Care

Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were in the red. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 0.98%.

Cambrex (CBM) was down 13.39% after it reported late Thursday better-than-expected financial results for Q2 ended June 30, and raised its guidance for fiscal 2014 above Street forecasts. The life sciences company posted Q2 adjusted income from continuing operations of $11.0 million or $0.35 per share, compared with the prior-year period's $4.1 million or $0.13 per share. Revenue was $98 million,up 59% from $61.6 million in the same quarter last year. Analysts polled by Capital IQ were expecting EPS of $0.28 on revenues of $87.57 million.

The company raised its fiscal 2014 guidance, now expecting a 13% - 16% increase in revenue, from fiscal 2013's revenue of $318.18 million. This calculates to revenue of $359.54 million - $369.09 million, versus the Street view of $351.56 million. The prior growth guidance range was 8% - 12%. Earnings are now expected to be $1.07 - $1.15 EPS, versus the Street view of $1.01. The prior guidance range was for EPS of $$0.99 - $1.10.

Winners and Losers


Select Financial Sector SPDRs (XLF) was down 0.98%. Direxion Daily Financial Bull 3X shares (FAS) was down 2.52% while its bearish counterpart, FAZ, was up 2.68%.

Green Dot Corp (GDOT) was up 10.62% after the pre-paid debit card company Thursday night posted Q2 per-share earnings that beat analyst projections and raised its FY14 EPS forecast above the Street consensus. The company reported Q2 net income of $0.41 per share, excluding non-recurring items, beating the Capital IQ consensus by $0.16. Revenue rose 4.5% year over year to $147.01 million, lagging estimates by around $6.11 million.

Looking forward to its FY14 ending in December, GDOT is now expecting net income in a range of $1.37 to $1.41 per share, up $0.15 per share from its previous forecast and exceeding the consensus call by at least $0.10 per share. It also sees revenue this year in a range of $640 million to $650 million, topping estimates by at least $5.23 million.


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 weaker. SPDR S&P International Technology Sector ETF (IPK) was flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.42% while Semiconductor Sector Index Fund (SOXX) was down 0.41%.

ServiceSource International (SREV) was down 27.31% after the company said that for Q2, or the quarter ended June 30, 2014, its loss was wider than expected, while revenue fell short of analysts' expectations. The service revenue management company reported Q2 non-GAAP net loss in the quarter was $7.3 million or $0.09 loss per share, compared with non-GAAP net income of $1.5 million or $0.02 per share in the prior-year period. The Capital IQ analyst estimate is for $0.06 loss per share. Non-GAAP revenue was $66.3 million, down 2% from $67.7 million in the same quarter last year. Analysts were expecting revenue of $69.86 million.


Dow Jones U.S. Energy Fund (IYE) was down 1.44%; Energy Select Sector SPDR (XLE) was down 1.43%.

LRR Energy LP (LRE) was down 4.20% after it reported in Thursday's after hour session that its net loss during the three months ended June 30 widened to $7.33 million, or $0.27 per share, from $4.64 million during the same quarter last year, and trailing the Capital IQ consensus by $0.02 per share. Total revenue also plunged, declining 59.9% year over year to $17.4 million from $43.4 million last year and missing the Street view by around $15.56 million. The company also raised its forecast for FY14 production by around 50 barrels per day from its prior guidance to a new range of 6,450 to 6,550 barrels per day.


Crude was down 0.93%; United States Oil Fund (USO) was down 0.74%. Natural gas was up 0.10% and United States Natural Gas Fund (UNG) was up 0.33%.

Gold was up 1.00%, and silver was down 0.37%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.94% and iShares Silver Trust (SLV) was up 0.10%.


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

Skullcandy (SKUL) was up 8.14% after it reported Q2 EPS of $0.06, up from a year ago loss of $0.02 per share and ahead of the analyst consensus of $0.01 per share on Capital IQ. Sales were $53.9 million, up from $50.8 million last year and in line with the Street view. For the full year 2014, the company expects GAAP EPS of $0.22 to $0.26, vs. expectations of $0.19 per share. Sales are seen increasing in the mid- to high-single digit percentage range over 2013 levels. For Q3, the company expects sales to increase between 7% and 9% over 2013 levels and sees GAAP EPS of $0.02 to $0.05 per share. The Street view is GAAP EPS of $0.05 per share.

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

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

This article appears in: Investing Commodities
Referenced Stocks: SPY , EEM , VXX , QQQ , IWM

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