Active broad-market exchange-traded funds in Tuesday's regular
SPDR S&P 500 (
iShares Russell 2000 Index (
iShares MSCI Emerging Markets Index (
PowerShares QQQ Trust, Series 1 (
Market Vectors Gold Miners (
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM and IVV,
edged lower at session's half; actively traded PowerShares QQQ (
) was down 0.75% but after it reached a new 13-year high.
U.S. stocks also reversed earlier gains following Fed Chair
Janet Yellen's comments during her testimony before Congress this
morning that social media, biotech and other momentum stocks could
be overvalued. Economic data reported earlier were mixed. U.S.
import price index rose 0.1% in June due to higher fuel costs, but
missed expectations. Excluding fuel, import prices fell 0.1%.
Retail sales climbed a seasonally adjusted 0.2% in June but also
missed forecasts. Excluding autos, retail sales rose 0.4%. Finally,
the New York Fed reported that the Empire State manufacturing
survey rose to a 4-year high, to 25.6 in July.
Power Play: Financial
Select Financial Sector SPDRs (XLF) was up 0.28%. Direxion Daily
Financial Bull 3X shares (FAS) was up 0.56% while its bearish
counterpart, FAZ, was down 0.57%.
JPMorgan Chase (JPM) was up 3.71% after the bank reported
better-than-expected Q2 earnings and said it has seen an
improvement across its businesses. Net income for Q2 fell to $6.0
billion, compared with net income of $6.5 billion in the second
quarter of 2013. Earnings per share were $1.46, compared with $1.60
in the second quarter of 2013. However, that tops forecasts for
$1.29. Revenue for the quarter was $25.3 billion, down 2% compared
with the prior year, but above forecasts for $23.76 billion.
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 lower. SPDR S&P International Technology Sector ETF
(IPK) was down 0.46%.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and
Semiconductor Sector Index Fund (SOXX) were in the red.
Shares of social media companies extended losses Tuesday after
Federal Reserve Chairman Janet Yellen remarked to the Senate
Banking Committee that several market sectors, including the social
media and biotech sector, appear to be overvalued. Yellen said that
valuation metrics in some sectors "appear substantially stretched
... particularly those for smaller firms in the social media and
biotechnology industries, despite a notable downturn in equity
prices for such firms early in the year."
Social media companies that have slipped following Yellen's
remarks include Facebook (FB) down 1.39%, LinkedIn (LNKD) down
1.4%, MeetMe (MEET) down 4%, Pandora Media (P) down 1.93%, Twitter
) down 0.81%, and Yelp (YELP) down 3.98%.
Dow Jones U.S. Energy Fund (IYE) was down 1.05%; Energy Select
Sector SPDR (XLE) was down 0.98%.
Ocean Power Technologies (OPTT) was down 30% after the company
said it has cancelled plans to build a wave energy project off the
coast of Australia, saying it says is no longer commercially
viable. According to an SEC filing, OPTT's subsidiary, Victorian
Wave Partners, tendered a notice to the Australian Renewable Energy
Agency, terminating its demonstration project funding deed. OPTT
says it will repay what it has received of a A$66.5 million
government grant, which was intended to be used toward the A$232
million proposed cost of building the project.
Crude was down 1.51%; United States Oil Fund (USO) was down
1.63%. Natural gas was down 0.58% and United States Natural Gas
Fund (UNG) was down 1%.
Gold was down 0.77%, and silver was down 0.31%. Among rare metal
funds, SPDR Gold Trust (GLD) was down 2.42% and iShares Silver
Trust (SLV) was down 0.55%.
Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US
Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were
Wolverine World Wide (WWW) was down 2.34% after it reported Q2
adjusted EPS of $0.31, better than the analyst consensus of $0.27
per share on Capital IQ. Revenue was $613.5 million, ahead of
expectations of $608.8 million. Based on revised expectations for
the remainder of the year, the company expects its full-year
consolidated revenue to approximate $2.775 billion, representing
growth of approximately 3% compared to prior year revenue of $2.69
billion, and about in line to just shy of the Street view of $2.791
billion. The company is reaffirming its adjusted earnings per share
estimate in the range of $1.57 to $1.63 per share - growth of 10%
to 14% compared to prior year adjusted earnings per share of $1.43.
The Street is at $1.61 per share. On a reported basis, earnings per
share are expected in the range of $1.32 to $1.38 per share and
reflect the impact of the company's Strategic Realignment Plan.
As part of the realignment plan, the company is closing about
140 retail locations, primarily Stride Rite stores, over the next
18 months. Wolverine estimates pretax charges related to the plan
in the range of $30 million to $37 million, and expects to record
these charges between now and the end of fiscal 2015 as it executes
each component. Approximately $13 million to $15 million of this
estimate represents non-cash charges, primarily asset write-offs
related to closed retail locations and restructuring charges
related to the remaining retail store fleet and international
operations. Of this non-cash amount, $3.4 million was recorded in
the second fiscal quarter.
Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH)
and Vanguard Health Care ETF (VHT) were higher. Biotech ETF iShares
NASDAQ Biotechnology Index (IBB) was up 0.64%.
Codexis (CDXS) was up 46% after it said late Monday that it
signed a platform technology license agreement with GlaxoSmithKline
(GSK) under which it will receive $25 million over the next two
years. Under the terms of the agreement, Codexis granted GSK a
license to use Codexis' proprietary CodeEvolver protein engineering
platform technology in the field of human healthcare. The license
allows GSK to use Codexis' platform technology to develop novel
enzymes for use in the manufacture of GSK's pharmaceutical and
health care products. GSK may also use the licensed technology to
develop new therapeutic, diagnostic and prophylactic products in
the human health field. Upon completion of technology transfer, GSK
will have Codexis' state-of-the-art CodeEvolver protein engineering
platform installed at its Upper Merion, Pennsylvania research and
Codexis is eligible to receive up to $25 million over
approximately the next two years, $6 million of which will be paid
upfront shortly after signing and an additional $19 million subject
to satisfactory completion of technology transfer milestones.
Codexis also has the potential to receive numerous additional
milestone payments that range from $5.75 million to $38.5 million
per project based on GSK's successful application of the licensed
technology. In addition, Codexis will be eligible to receive
royalties based on net sales, if any, of a limited set of products
developed by GSK using Codexis' CodeEvolver protein engineering