Mid-Day ETF Update: ETFs Firmer, Stocks Higher On Renewed Hopes For Budget Deal, New Round of Bond Purchases

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Active broad-market exchange-traded funds at mid-day:

SPDR S&P 500 ( SPY ): +0.8%, hit new year highs.

iShares MSCI Emerging Markets Index ( EEM ): +0.5%.


Financial Select Sector SPDR ( XLF ): +0.7%, nearer 52 week highs.

PowerShares QQQ Trust, Series 1 ( QQQ ): +1.6%

iShares Russell 2000 Index ( IWM ): +1.16%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM, IVV and others, are firmer. Actively traded PowerShares QQQ ( QQQ ) is up 1.6%.

U.S. stocks are higher as investors grow optimistic following a report in the Wall Street Journal that budget talks have made steady progress over the past few days,. Also, House Speaker John Boehner said he is "hopeful" that the fiscal deal can be reached. Many market watchers also believe the Federal Reserve, which is holding a two-day meeting, will introduce further monetary stimulus in Q4 and this is helping market sentiment.

Winners and Losers

Technology -

Tech ETFs are well in the green: Technology Select Sector SPDR ETF (XLK), up 1.6%; iShares Dow Jones US Technology ETF (IYW), up 1.7%; iShares S&P North American Technology ETF (IGM), up 1.54%; and iShares S&P North American Technology-Software Index (IGV), up 1.74%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) is up 2.6%; and Semiconductor Sector Index Fund (SOXX) is up 2%.

SPDR S&P International Technology Sector ETF (IPK) is up 0.69%, near its year high.

In sector news, Texas Instruments (TXN) is up 3.9% after the company said late Monday that it expects Q4 revenue in the range of $2.89 to $3.01 bln, within its previous guidance range of $2.83 to $3.07 bln and straddling the analyst consensus of $2.94 bln on Capital IQ. The company expects EPS of $0.05 to $0.09 per share, vs. its prior view of $0.23 to $0.31 per share. EPS now includes $0.21 of charges associated with previously announced restructuring in the company's Wireless segment. The Street is at $0.33 per share.

Energy -

Dow Jones U.S. Energy Fund (IYE) is up 0.7%; Energy Select Sector SPDR (XLE) is up also around 0.7% higher.

In sector news, Spectra Energy (SE) has acquired 100% of the ownership interests in the Express-Platte Pipeline System from Borealis Infrastructure, the Ontario Teachers' Pension Plan and Kinder Morgan Energy Partners (KMP) for $1.49 billion, consisting of $1.25 billion cash and $240 million of acquired debt. The acquisition is expected to be immediately accretive to earnings, with expected full-year 2013 EBITDA of about $130 million and full-year annual EPS accretion in the $0.03 to $0.05 per share range. SE shares are down 0.6% having earlier gone close to 52 week lows while KMP shares are down 2%.

Commodities -

Crude was up 0.27%; natural gas was down 0.35%. United States Oil Fund (USO) is up 0.03%. United States Natural Gas Fund (UNG) has turned negative and is now down 0.66%.

Gold was down 0.27%. Silver was down 1.07%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.17%; iShares Silver Trust (SLV) is down 0.81%.

Healthcare -

Healthcare ETFs are higher: Health Care SPDR (XLV), up 1.2%, near its year high; Vanguard Health Care ETF (VHT), up 1.2%; and iShares Dow Jones US Healthcare (IYH) is up 1.1%, also nearing its 52-week high. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is up 1.4%.

In corporate news, Somaxon Pharmaceuticals (SOMX) is now up nearly 80% after the company said it will be acquired by Pernix Therapeutics (PTX) in a stock-for-stock transaction with a total equity value of $25 million. Under the terms of the agreement, SOMX stockholders will receive aggregate consideration equal to $25 million in PTX common stock. The number of shares of PTX common stock to be issued to SOMX stockholders will be based on the volume-weighted average price of PTX's common stock over the 30 day period ending on the day immediately prior to the closing of the proposed merger, subject to limitations on the maximum and minimum number of shares of Pernix common stock issuable in the transaction, based on a price range of $6.00 to $9.00 per share. PTX shares are down 0.5% at around $7.89, but well above a day low $7.26.

Consumer -

Consumer ETFs are showing strength in mid-day: Consumer Staples Select Sector SPDR (XLP), up 0.4%, nearing its year high; iShares Dow Jones US Consumer Goods (IYK), up 0.7%, with a new year high of $76.71; and Vanguard Consumer Staples ETF (VDC), up 0.6%, also nearing its year high.

Retail ETFs are firmer: SPDR S&P Retail (XRT), up 0.6%; PowerShares Dynamic Retail (PMR), up 0.9%; and Market Vectors Retail ETF (RTH), up 0.29%, reaching a new year high of $45.37.

In sector news, Urban Outfitters (URBN) is up 4.8% to near 52 week highs after it disclosed that comparable Retail segment net sales so far in Q4 are high single-digit positive, which is above the mid single-digit Street forecast of about 4.7% increase in comps. The company said it expects better sales Q4 and the holiday season. Shares were also initiated with a Neutral rating and a price target of $42 a share at Goldman Sachs.

Power Play -

Financial -

Select Financial Sector SPDRs ( XLF ) is up 0.6%, near year highs. Direxion Daily Financial Bull 3X shares (FAS) is up 1.8%. Its bearish counterpart, FAZ, is down 1.8% and nearer 52 week lows.

Among financial stocks, American International Group (AIG) is now up 4.8%, adding to earlier gains, after the U.S. Department of the Treasury sold an offering of about 234.2 million shares of AIG common stock at a price to market of $32.50 per share. Upon the closing of this transaction, the Treasury will have sold the last of its remaining shares of AIG common stock, receiving proceeds of $7.6 billion from the sale. The closing of the transaction will also mark the full resolution of the U.S.'s financial support of AIG.



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 , IWM , QQQ , SPY , XLF

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As of 12/24/2014, 02:12 PM


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