Mid-Day ETF Update: ETFs, Stocks Sink Lower Amid Post-Election Fiscal Cliff Fears


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

SPDR S&P 500 ( SPY ): -2%

Financial Select Sector SPDR ( XLF ): -2.7%

iShares MSCI Emerging Markets Index ( EEM ): -1.6%

iPath S&P 500 VIX Short Term Futures TM ETN ( VXX ): +6.4%

iShares Russell 2000 Index ( IWM ): -2.5%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM, IVV and others, are sharply lower. Actively traded PowerShares QQQ (QQQ) is down 2.3%.

U.S. stocks continue to be slammed in mid-day action, with the financial and energy sectors especially underperforming while the rest are tracking the broader market lower. With President Barack Obama set to start a second term in office, post- election concerns, particularly around the so-called fiscal cliff, have steadily gained traction, driving market sentiment lower. Much of Wall Street's fears revolve around the possibility that the economy could go into another recession should a divided Congress fail to reach a compromise before $600 billion of automatic tax increases and spending cuts take effect at the end of 2012.

Winners and Losers

Financial -

Select Financial Sector SPDRs ( XLF ) is down 2.6%. Direxion Daily Financial Bull 3X shares (FAS) is down 7%. Its bearish counterpart, FAZ, is up 6.7%.

Among financial actives, JP Morgan (JPM) is down 4.4% after WSJ reported that the bank is close to a settlement with the Securities and Exchange Commission that would end one probe into how the company's Bear Stearns Cos. unit packaged and sold home loans to investors.

Technology -

Tech ETFs are sharply lower: Technology Select Sector SPDR ETF (XLK), down 2.1%; iShares Dow Jones US Technology ETF (IYW), down 2.5%; iShares S&P North American Technology ETF (IGM), down 2.3%; and iShares S&P North American Technology-Software Index (IGV), down 2.2%.

Likewise, semiconductor ETFs are seeing continued weakness: SPDR S&P Semiconductor (XSD) is down 3.2%; and Semiconductor Sector Index Fund (SOXX) is down 2.8%.

SPDR S&P International Technology Sector ETF (IPK) is down 1.96%.

In sector news, VirnetX Holding Corp. (VHC) is up more than 20% following a report on Bloomberg stated that it was awarded $368.2 million, after a federal jury yesterday said Apple Inc. (AAPL) infringed its patents for virtual-private-network technology used in Apple's FaceTime video-calling function. Shares of Apple are now down 2.84%.

Industrial -

Industrial ETFs are in the red: Vanguard Industrials (VIS), down 2.1%; iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), down 2%; and Select Sector SPDR-Industrial (XLI), down 2.1%.

In sector news, Agrium (AGU) is now down 9.5% after the company reported Q3 earnings of $1.34 per share, ex one-time items, versus the Capital IQ consensus of $1.82. Revenues were $2.96 bln, versus the analyst estimate of $3.07 bln. The company expects Q4 EPS of $1.50-$1.90, below the Street view of $2.07 EPS.

Energy -

Dow Jones U.S. Energy Fund (IYE) is down 2.3%; Energy Select Sector SPDR (XLE) is down 2.1%.

In sector news, James River Coal (JRCC) continues to sink into negative territory, now down 23% after earlier reporting a Q3 loss of $0.59 per share, which includes a gain from the repurchase of outstanding notes in open market purchases, and may not be comparable to the Capital IQ consensus of $1.01 loss per share. In the same period last year, the company reported a loss of $0.11 per share. Revenues were $288.1 mln, down 5.2% from the prior-year period's $303.86 mln. This beat the analyst estimate of $264.29 mln.

Commodities -

Crude was down 4.07%; natural gas was down 1.31%. United States Oil Fund (USO) is down 3.6%. United States Natural Gas Fund (UNG) is down 0.9%.

Gold was down 0.16%; silver was down 1.31%. Among rare metal funds, SPDR Gold Trust (GLD) is down 0.29%; iShares Silver Trust (SLV) is down 1%.

Among stocks, Randgold Resources (GOLD) ADRs are down 7% after it reported Q3 earnings of $1.12 per basic share, or $1.11 per diluted share, versus the Capital IQ consensus of $1.45. Revenues were $319.9 mln, versus the analyst estimate of $379.13 mln.

Healthcare -

Healthcare ETFs continue to be sharply lower: Health Care SPDR (XLV), down 1.5%; Vanguard Health Care ETF (VHT), down 1.5%; and iShares Dow Jones US Healthcare (IYH), down 1.5% Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is down 2.2%.

In corporate news, Tenet Healthcare (THC) is up 10% to new year highs after the company earlier reported Q3 earnings of $0.37 per share, versus the Capital IQ consensus of $0.32. Revenues were $2.43 bln, versus the analyst estimate of $2.42 bln.

Power Play -

Consumer -

Consumer ETFs slipped lower at session's half: Consumer Staples Select Sector SPDR (XLP), down 1.24%; iShares Dow Jones US Consumer Goods (IYK), down 1.39%; and Vanguard Consumer Staples ETF (VDC), down 1.18%.

Retail ETFs are lower: SPDR S&P Retail (XRT), down 1.76%; PowerShares Dynamic Retail (PMR), down 1.63%; and Market Vectors Retail ETF (RTH), down 1.18%.

In sector news, Blyth (BTH) is down 10% at aroudn $17.10 but well above a new year low of $15.63 hit ealier. The company earlier said reported earnings per share is expected to be $2.28 - $2.43 for the year ending December 31, 2012 compared to prior guidance of reported earnings per share of $2.47 - $2.62. On a normalized basis, earnings per share is expected to be $2.40 to $2.55 for the year ended December 31, 2012 compared to prior guidance of $3.00 to $3.15. Cash flow from operations for 2012 is expected to be approximately $65 million versus prior guidance of $85 million, reflecting the impact of lower projected sales and IPO related fees. Capital spending is anticipated to be approximately $20 million.

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

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

This article appears in: Investing , Commodities

Referenced Stocks: EEM , IWM , SPY , VXX , XLF

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