Mid-Day ETF Update: Losses Reversed - Obama Reassures No Gov't Shutdown as Sequester Kicks In


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

SPDR S&P 500 ( SPY ): +0.40%

iPath S&P 500 VIX Short Term Futures TM ( VXX ): +0.88%

Financial Select Sector SPDR ( XLF ): +0.34%, near 52 week highs.

iShares Russell 2000 Index ( IWM ): +0.28%

iShares MSCI Emerging Markets Index ( EEM ): -0.02%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM, IVV and others, edged higher. Actively traded PowerShares QQQ (QQQ) was up 0.46%.

U.S. stocks have reversed earlier losses following President Barack Obama's reassurances that he wants to prevent a partial government shutdown -- a possible result should the Congress fail to approve a new budget before March 27.

Market sentiment took a beating earlier as the sequester cuts took effect after neither of the two bills offered by Democrats and Republicans, aimed at averting the automatic federal budget cuts, gained enough support in the Senate.

Also casting a pall over markets were downbeat economic data, with personal income, personal spending, and core personal consumption for January all missing economists' forecasts. January construction spending also fell 2.1%, falling short of the 0.5% increase analysts had expected, according to Briefing.com. In the meantime, the February ISM index showed a reading of 54.2, while February Michigan Sentiment had a final reading of 77.6 -- both topped estimates.

Winners and Losers

Financial -

Select Financial Sector SPDRs ( XLF ) was up 0.34%, near its 52-week high. Direxion Daily Financial Bull 3X shares (FAS) was up 0.71%. Its bearish counterpart, FAZ, was down 0.84%.

Among financial stocks, MGIC Investment (MTG) was up 21.81% after the mortgage insurer's chief executive officer, Curt Culver, said the company may soon raise capital to reduce a risk measure that breached regulatory limits. Culver said on Thursday during a conference call discussing MTG's Q4 financial results that the firm is evaluating ways to cut the level of risk relative to capital, including raising external cash. MTG posted a Q4 net loss of $1.91 per share, widening from a $0.67 loss last year and trailing the Thomson Reuters consensus by $1.79 per share. It was MTG's tenth quarterly loss in a row.

Technology -

Tech ETFs were higher: Technology Select Sector SPDR ETF (XLK), was up 0.24%; iShares Dow Jones US Technology ETF (IYW), up 0.29%; iShares S&P North American Technology ETF (IGM), up 0.28%; and iShares S&P North American Technology-Software Index (IGV), up 1%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD), down 1.14% and Semiconductor Sector Index Fund (SOXX) was down 0.29%.

SPDR S&P International Technology Sector ETF (IPK) was flat.

In sector news, Mentor Graphics (MENT) shares were down 11.32% in early afternoon trade, adding to losses of some 4% in Thursday's after-hours trading, when the company said it expects Q1 revenues of about $225 mln and non-GAAP EPS of about $0.05. Analysts are looking for EPS of $0.05 on revenues of $241.68 mln. For FY14, the company expects revenues of about $1.155 bln and non-GAAP EPS of about $1.53, versus the Street view of $1.16 bln in revenues and $1.58 EPS. The company also reported adjusted EPS of $0.58 per share, better than the $0.55 the Street expected. Total revenues were $331.3 mln, up from $320.4 million a year prior and lower than the $343.2 mln the Street expected.

Energy -

Dow Jones U.S. Energy Fund (IYE) was off 0.20%; Energy Select Sector SPDR (XLE) was down 0.06%.

In sector news, EV Energy Partners (EVEP) was down 7.59% after it reported a Q4 loss of $0.23 per share, compared with $0.27 EPS in the prior-year period. This quarter's results include one-time items and may not be comparable to the Capital IQ consensus of $0.47 EPS. Revenues were $75.5 mln, up 13% from $66.8 mln in the same period last year, and below the analyst estimate of $85.3 mln. Production for the quarter was 10.8 Bcf of natural gas, 277 MBbls of oil and 476 MBbls of natural gas liquids, or 15.3 Bcfe. This represents a 38% increase over Q4 2011 production of 11.1 Bcfe and a 2% increase over Q3 2012 production of 15 Bcfe.

Commodities -

Crude was down 1.38%; natural gas was down 0.54%. United States Oil Fund (USO) was down 1.15%. United States Natural Gas Fund (UNG) is down 0.99%.

Gold was down 0.18% and silver was up 0.36%. Among rare metal funds, SPDR Gold Trust (GLD) is down 0.50%; iShares Silver Trust (SLV) is up 0.17%.

Among stocks, Sibanye Gold (SBGL) was up 5.04%, trimming earlier gains of some 9%, after reporting its full-year earnings. The company earned 2.98 billion rand in 2012, a 16% increase on last year.

Healthcare -

Healthcare ETFs were higher, nearing their 52-week highs: Health Care SPDR (XLV), up 0.39%; Vanguard Health Care ETF (VHT), up 0.28%; and iShares Dow Jones US Healthcare (IYH), up 0.23%. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 0.41%.

In corporate news, Amarin (AMRN) was down 6.15% mid-day after it reported in yesterday's after-hours session a Q4 loss of $0.28 per share, ex one time items, versus the Capital IQ consensus of $0.29 loss per share. In the same period last year, the company reported a loss per share of $0.08.

Power Play -

Consumer -

Consumer ETFs are mixed: Consumer Staples Select Sector SPDR (XLP), up 0.21%; iShares Dow Jones US Consumer Goods (IYK), down 0.16%; and Vanguard Consumer Staples ETF (VDC), down 0.13%.

Retail ETFs were mostly higher: SPDR S&P Retail (XRT), up 0.21%; PowerShares Dynamic Retail (PMR), down 0.30%; and Market Vectors Retail ETF (RTH), up 0.24%, with a new 52-week high of $46.75.

In sector news, Deckers Outdoor Corp. (DECK) was up 12.97%, adding to its pre-market gains of some 6%. The company reported in Thursday's after hours session Q4 sales of $617.3 mln, vs. the analyst consensus of $622 mln on Capital IQ. EPS was $2.77, vs. expectations of $2.61 per share.

For full year 2013, the company expects revenue to increase about 7% over 2012 levels. For Q1, revenue is expected to remain flat vs. Q1 last year. A loss of $0.12 per share is seen. The Street is at a profit of $0.03 per share.

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 , SPY , VXX , XLF

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