Mid-Day ETF Update: ETFs Track Stocks Lower on Weakness in Emerging Markets, Currencies and China Data


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Active broad-market exchange-traded funds at Friday's regular session:

SPDR S&P 500 ( SPY ): -1.4%

iShares MSCI Emerging Markets Index ( EEM ): -2%.

iShares MSCI Japan ( EWJ ): -1.2%

PowerShares QQQ Trust, Series 1 ( QQQ ): -1.2%

Select Financial Sector SPDRs ( XLF ): -1.7%

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

Broad Market Indicators

Most broad market exchange-traded funds were edging lower in the session's half. Actively traded PowerShares QQQ ( QQQ ) was down 1.2%.

U.S. stocks were in the red as well, with the main indices heading for weekly losses, pressured by a decline in emerging markets, weak Chinese economic data from earlier this week, and currency instability in Turkey, Argentina and Thailand. With no U.S. economic data on tap, investors have been digesting earnings reports. A few companies like Microsoft (MSFT), Kimberly-Clark and Covidien (COV) are bucking the downward trend after posting results, but this was not enough to offset the broader market gloom.

Power Play: Financial

Select Financial Sector SPDRs ( XLF ) was down 1.7%; Direxion Daily Financial Bull 3X shares (FAS) was down 5.1%. FAZ, was up 5.2%.

Among financial stocks, Prosperity Bancshares, Inc. (PB) was up more than 4% and reached record highs after reporting Q4 2013 net income was $62.971 million, or $0.98 per diluted share, up from net income of $48.266 million, or $0.85 per diluted share, in the same period last year. No information on the non-GAAP income was provided, which would have been comparable to the Capital IQ consensus of $0.91. Net interest income before provision for credit losses increased 34.3% to $145.469 million compared with $108.301 million during the same period in 2012.

Winners and Losers


Technology Select Sector SPDR ETF (XLK) was down 1.1%. 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 also lower, but still near 52 week highs. SPDR S&P International Technology Sector ETF (IPK) was flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 2% while Semiconductor Sector Index Fund (SOXX) was down 1.7%.

In stocks news, Open Text Corp. (OTEX, OTC.TO) was up nearly 12% and reached a record high after the company reported after the close on Thursday fiscal Q2 adjusted earnings of $1.58 per share, flat compared to the year-ago quarter but better than the Capital IQ analyst consensus for $1.50. Total revenue rose 3% year-over-year to $363.5 million. The Cap IQ consensus called for $352 million. The company declared a dividend of $0.15 per common share (or $0.30 per common share on a pre-stock split basis, also announced Thursday, 2-for-1 stock split). The record date for this dividend is Feb. 25, 2014 and the payment date is March 14, 2014.


Dow Jones U.S. Energy Fund (IYE) was down 1.7%. Likewise, Energy Select Sector SPDR (XLE) was lower, down 1.45% at last check.

In corporate news, CST Brands (CST) was down near 5% after it said Thursday that it expects US and Canada motor fuel volume and merchandise sales to be at the low end of its guidance in Q4. US motor fuel volume is seen at the low end of its guidance of 4,850 to 4,950 gallons per site per day. It also sees merchandise sales at the low end of the previously provided guidance of $3,250 to $3,350 per site per day. Merchandise gross margin percentages are seen slightly above its estimates.


Crude was up 0.76%; United States Oil Fund (USO) was down 0.4%. Natural gas was up 5.33%, after hitting a new 52-week high and United States Natural Gas Fund (UNG) was up 5.2% and near 52 week highs. Gold was up 0.10% and silver was down 0.90%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.1%; iShares Silver Trust (SLV) was down 1.25%.


Consumer Staples Select Sector SPDR (XLP), Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were all edging lower.

In stocks news, Procter & Gamble (PG) was up 2.5% after reporting Q2 core EPS of $1.21, a penny better than the analyst consensus on Capital IQ. Sales were $22.28 billion, just shy of expectations of $22.34 billion. The company reiterated its 2014 outlook, expecting organic sales growth of 3% to 4%. All-in sales growth is estimated in the range of one percent to two percent, including a negative foreign exchange impact of approximately 2%. Core earnings per share are expected to grow five percent to seven percent for the fiscal year, and reported earnings per share are expected to grow in the range of 7% - 9%.


Health Care SPDR (XLV) and Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) and Biotech ETF iShares NASDAQ Biotechnology Index (IBB) were all lower, but still near record highs.

In corporate news, Covidien PLC (COV) hit an all-time high Friday, and was still up some 2.5% at last check after posting adjusted earnings per share from continuing operations of $1, up from $0.97 a year earlier and topping the Capital IQ consensus by $0.06. Net sales rose 2.8% to $2.64 billion, in line with analysts' estimate for $2.6 billion. For fiscal 2014, the company confirmed its December guidance, which had been for net sales to rise 2% to 5% from fiscal 2013.

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

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This article appears in: Investing , Commodities
More Headlines for: EEM , EWJ , QQQ , SPY , XLF

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