Mid-Day ETF Update: ETFs, Stocks Rallying as Markets Cheer Budget Deal to Avert Fiscal Cliff

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

PowerShares QQQ Trust, Series 1 ( QQQ ): +2.4%

Direxion Daily Small Cap Bear 3X Shares ( TZA ): -7.8%, touched a new year low

iShares MSCI Japan Index ( EWJ ): +1.8%

Vanguard MSCI Emerging Markets ( VWO ): +1.75%, has jumped to a new year high

iShares MSCI EAFE Index Fund ( EFA ): +1.1%, also reached a new year high

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM, IVV and others, continue to be sharply firmer. Actively traded PowerShares QQQ ( QQQ ) is up 2.4%.

U.S. stocks are rallying too, with most sectors adding to earlier gains as investors cheer the passage of a bipartisan deal which averted the tax hikes and spending cuts that were scheduled to take effect on January 1, 2012, and threatened to potentially push the U.S. economy into another recession. After several weeks of negotiations, Senate and Congress signed the budget accord in the wee hours of Tuesday morning. According to Marketwatch, the bill will raise tax rates on upper-level household incomes, extend unemployment benefits, and put off spending cuts for two months.I t is now expected to be signed into law by President Barack Obama. Also helping sustain the markets' "relief rally" is the upbeat manufacturers' data released earlier - the December ISM Index was up 50.7%, slightly higher than the 49.5% in November. However, November construction spending declined 0.3% and missed economists' estimates of an increase of 1.4%.

Winners and Losers

Financial -

Select Financial Sector SPDRs (XLF) is up 2.3%, jumping to a new year high of $16.83. Direxion Daily Financial Bull 3X shares (FAS) is up 6.2%, also touching a new 52-year high of $128.70. Its bearish counterpart, FAZ, is down 6.1%, reaching a new year low of $14.02.

Among financial actives, BGC Partners Inc. (BGCP) is up more than 6% and moving further away from 52 week lows after the company earlier announced that it has acquired Smith Mack, a commercial real estate services company in Philadelphia and the surrounding region. Financial details of the agreement were not disclosed.

Technology -

Tech ETFs continue to be firmer: Technology Select Sector SPDR ETF (XLK), up 2.1%; iShares Dow Jones US Technology ETF (IYW), up 2.3%; iShares S&P North American Technology ETF (IGM), up 2.3% and iShares S&P North American Technology-Software Index (IGV), up 2%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) is up 3.57% and Semiconductor Sector Index Fund (SOXX) is up 3.2%.

SPDR S&P International Technology Sector ETF (IPK) is up 1.03%, reaching a new year high of $27.46.

In sector news, InterDigital (IDCC) is up 4.5% after the company announced its patent holding subsidiaries have entered into an agreement which extends the term of their worldwide, non-exclusive, royalty-bearing patent license agreement with Research In Motion (RIMM). In addition to extending the patent license agreement for a multi-year period consistent with IDCC's licensing program, the parties agreed to amend the patent license to add coverage for 4G products, including LTE and LTE-Advanced products. Separately, the company through its wholly owned subsidiaries, has filed a new complaint with the U.S. International Trade Commission (USITC) against Huawei Technologies Co., Ltd., Nokia Corporation (NOK), Samsung Electronics Company, Ltd., and ZTE Corporation, alleging that the respondents engaged in unfair trade practices by selling and importing into the U.S. certain 3G and 4G wireless devices that infringe up to seven of IDCC's U.S. patents.

Energy -

Dow Jones U.S. Energy Fund (IYE) is up 1.2%; Energy Select Sector SPDR (XLE) is up 1%.

In sector news, InterOil (IOC) is now up 7.5% but off day highs after it said Wednesday that the Antelope-3 well reached total depth on December 25th, and the wireline logging program is currently in progress.

Commodities -

Crude was up 1.07%; natural gas was down 4.19%. United States Oil Fund (USO) is up 1.35%. United States Natural Gas Fund (UNG) is down 4.6%.

Gold was up 0.87% and silver was up 2.86%. Among rare metal funds, SPDR Gold Trust (GLD) is up 1%; iShares Silver Trust (SLV) is up 2.3%.

Healthcare -

Healthcare ETFs are higher: Health Care SPDR (XLV), up 1.2%; Vanguard Health Care ETF (VHT), up 1.5%; and iShares Dow Jones US Healthcare (IYH), up 1.4%. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is up 2.7%.

In corporate news, Synergy Pharmaceuticals (SGYP) is up 17% but off day highs after the company reported that in its Phase IIb/III clinical study of plecanatide, its investigational oral drug for the treatment of chronic idiopathic constipation (CIC), plecanatide was well tolerated and met the primary and key secondary endpoints of a Phase IIb/III clinical study. The study was designed to determine whether plecanatide could increase the number of complete spontaneous bowel movements and impact other parameters in patients with CIC.

Power Play -

Consumer -

Consumer ETFs are firmer, mostly in the higher end of their trading ranges: Consumer Staples Select Sector SPDR (XLP), up 1.89%; iShares Dow Jones US Consumer Goods (IYK), up 2% to near 52 week highs; and Vanguard Consumer Staples ETF (VDC), up 1.8%.

In sector news, Avis Budget Group, Inc. (CAR) has agreed to acquire Zipcar, Inc. (ZIP) for $12.25 per share in cash, a 49% premium over the closing price on December 31, 2012, representing a total transaction value of approximately $500 million. ZIP shares are now up near 50% while CAR shares are up 4.5% and reached a new year high of $21.10.



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: EFA , EWJ , QQQ , TZA , VWO

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As of 10/24/2014, 04:15 PM

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