Mid-Day ETF Update: ETFs, Stocks Continue Sharp Losses As Apple Slips Below $400

By MidnightTrader.com Staff,

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

SPDR S&P 500 ( SPY ): -1.91%

iPath S&P 500 VIX Short Term Futures TM ( VXX ): +13.72%

ProShares Trust II ( UVXY ): +27.7%

Financial Select Sector SPDR ( XLF ): -2.51%

iShares MSCI Emerging Markets Index ( EEM ): -2.13%

Broad Market Indicators

Broad market exchange-traded funds, including SPY, IWM, IVV and others continued to log sharp losses. Actively traded PowerShares QQQ (QQQ) was down 2.25%.

U.S. stocks remained in the negative territory at session's half, with the technology and financial sectors underperforming the broader market, as disappointing earnings from Bank of America (BAC) and Yahoo! (YM) soured market sentiment.

Investors continued to focus on earnings news: among those in the spotlight, Apple (AAPL) hit a new 52-week low, of $399.58 -- the first time it slipped below $400 since December 2011. Shares of the tech giant were dragged by chip supplier Cirrus Logic (CRUS), which slipped lower after issuing downbeat guidance.

Weekly MBA mortgage applications rose 4.8%, adding to last week's increase of 4.5%. The Federal Reserve's April Beige Book is due to be released at 2:00 pm ET.

Winners and Losers

Financial -

Select Financial Sector SPDRs ( XLF ) was down 2.51%. Direxion Daily Financial Bull 3X shares (FAS) was down 6.63%. Its bearish counterpart, FAZ, is up 6.61%.

Among financial stocks, Bank of America (BAC) was down 6.19%, adding to earlier losses of about 3% after it reported EPS of $0.20, $0.03 shy of analyst estimates and reported revenues of $23.7 billion, also lower than consensus of $25.2 billion. This was a result of higher expenses than expected and slowing loan growth, both from mortgages and consumers.

The silver lining in the quarter is the company did post higher investment banking and trading fees and a higher net interest margin q/q. However, analysts are likely to question the quality of earnings as BAC set aside only $1.7 billion for bad loans, which is lower than investor estimates (approximately $2 billion).

Energy -

Dow Jones U.S. Energy Fund (IYE) was down 2.68% and Energy Select Sector SPDR (XLE) was down 2.75%.

In sector news, Atlas Energy (ATLS) was up 10.83% and set a new 52-week high of $52.33 after its Atlas Pipeline unit said it has agreed to buy TEAK Midstream, which has assets in the core of Texas' oil and gas rich Eagle Ford Shale for $1 billion in cash. The transaction is expected to close in Q213.

Annualized Q414 EBITDA from the acquired TEAK assets is expected to reach $160 million, of which 80% is fee-based, the company said. The acquisition will also add more than $25 million to $40 million in annual distributable cash flow to Atlas, or approximately $0.45 to $0.75 per unit, as the assets mature.

Commodities -

Crude was down 2.59%; natural gas was up 0.52%. United States Oil Fund (USO) was down 2.74%. United States Natural Gas Fund (UNG) was up 0.26%.

Gold was down 0.25%. Silver was down 1.41%. Among rare metal funds, SPDR Gold Trust (GLD) up 0.9%. iShares Silver Trust (SLV) was down 0.35%.

Healthcare -

Healthcare ETFs were in the red: Health Care SPDR (XLV), down 0.88%; Vanguard Health Care ETF (VHT), down 0.97%; and iShares Dow Jones US Healthcare (IYH), down 0.93%. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is also lower, down 1.79%.

In corporate news, Acura Pharmaceuticals (ACUR) was up 49.77% to $3.22 after the FDA says the development of abuse-deterrant opiod analgesics should be a public health priority. Acura Pharmaceuticals was awarded a patent claim for abuse deterrant drugs on April 4.

Consumer -

Consumer ETFs were lower: Consumer Staples Select Sector SPDR (XLP), down 0.91%, but with a new 52-week high of $40.73; iShares Dow Jones US Consumer Goods (IYK), down 1.27%; and Vanguard Consumer Staples ETF (VDC), down 0.94%.

In sector news, Kid Brands (KID) was up 4.76% after it reported an adjusted Q4 loss of $0.03 per share, versus the Capital IQ consensus of $0.01 loss per share. Revenues were $57.9 million, versus the analyst estimate of $59.43 million.

The company's gross profit for the quarter was $13.8 million, or 23.8% of net sales, as compared to gross loss of $13.8 million for in the same quarter a year ago. This was due to non-cash impairments, the impact of lower markdowns and allowances, lower inventory reserves and amortization costs and the impact of higher costs of products.

Power Play -

Technology -

The tech sector continued to underperform the broader market, weighed by Apple (AAPL), which touched a new 52-week low of $399.58 - the first time it slipped below $400 since December 2011.

The tech giant was seeing pressure as one of its suppliers, Cirrus Logic (CRUS) reported disappointing guidance. CRUS was down 14.76% and touched a new 52-week low of $18.22. Mixed earnings results from Intel (INTC) and Yahoo! (YHOO) also weighed on the sector.

YHOO was down 0.8%, paring earlier losses after it reported late Tuesday 1Q adjusted EPS of $0.38, exceeding consensus of $0.24 (Thomson Reuters). The $0.14 delta vs. street expectations was a result of lower traffic acquisition costs (down a whopping 54% y/y), higher other income ($17M vs. 2.3M LY), a lower tax rate, and share repurchase (38M shares bought during the quarter).

Investors will likely have many questions on the line items that helped EPS on the call and whether they will continue at this rate. Worth noting, the company is excluding stock based compensation beginning this quarter, which will likely boost the bottom line going forward.

Revenues of $1.14 billion also fell short of estimates, down 7% over LY, as a result of competition from Google (GOOG) and Facebook (FB). Display revenue decreased 11% over LY as YHOO experienced both pricing pressure (price/ad down 2% y/y) and volume declines (number of ads sold down 7% y/y). Search revenue also decreased by 10% over LY (paid clicks, which were up 16% were not enough to offset the 7% decline in price/click).

Tech ETFs were weaker at mid-day: Technology Select Sector SPDR ETF (XLK), down 2.12%; iShares Dow Jones US Technology ETF (IYW), down 2.5%; iShares S&P North American Technology ETF (IGM), down 1.96%; and iShares S&P North American Technology-Software Index (IGV), down 2%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 3.91% and Semiconductor Sector Index Fund (SOXX) was down 3.18%.

SPDR S&P International Technology Sector ETF (IPK) was down 1.98%.

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: EEM , SPY , UVXY , VXX , XLF

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