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ETF Preview: Broad Market ETFs Decline Despite Mostly Firmer Stock Futures

By: MT Newswires
Posted: 1/17/2014 8:59:00 AM
Referenced Stocks: EEM;IWM;QQQ;SPY;XLF

Active broad-market exchange-traded funds at Thursday regular session:

SPDR S&P 500 ( SPY ): -0.21%, but still near its all-time high.

iShares MSCI Emerging Markets Index ( EEM ): -0.58%.

Select Financial Sector SPDRs ( XLF ): -0.61%, near its five-year high

iShares Russell 2000 Index ( IWM ): -0.02%, but earlier touched fresh all time highs

PowerShares QQQ Trust, Series 1 ( QQQ ): -0.01%, but still near its 13-year highs.

Pre-Market Movers

VNM +3.2%

RUSL +2.9%

EWH +1.9%

GASL -3.3%

TUR -1.3%

Broad Market Indicators

Most broad market exchange-traded funds were edging lower pre-bell on Friday. Actively traded PowerShares QQQ ( QQQ ) has dropped 0.29%.

U.S. stock futures are pointing to a better open thanks to Q4 results from General Electric (GE) and Morgan Stanley (MS). Data out this morning includes housing starts, which came in slightly weaker than expected. The Commerce Department said groundbreaking dropped 9.8 percent to a seasonally adjusted annual rate of 999,000-unit pace. The forecast was for a decline of 9.2%.

Power Play: Healthcare

Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) are all unchanged pre-bell, but are trading near the top of their 52-week ranges. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is also flat after reaching a record high Thursday.

In corporate news, Keryx Biopharmaceuticals (KERX) is up 7% in pre-market trade after disclosing that its Japanese partner, Japan Tobacco Inc. (JT), received manufacturing and marketing approval of ferric citrate from the Japanese Ministry of Health, Labour and Welfare. Ferric citrate, to be marketed in Japan by JT's subsidiary, Torii Pharmaceutical Co., Ltd., under the brand name Riona, is indicated as an oral treatment for the improvement of hyperphosphatemia in patients with chronic kidney disease (CKD), including dialysis and non-dialysis dependent CKD.

Winners and Losers


Select Financial Sector SPDRs ( XLF ) is flat, but still near its highest level since May 2008. Direxion Daily Financial Bull 3X shares (FAS) edging lower pre-market. Its bearish counterpart, FAZ is unchanged an remains near an all-time low.

Among financial stocks, Morgan Stanley (MS) reports Q4 non-GAAP earnings per share of $0.20 down from $0.49 a year ago, while GAAP EPS were $0.07 compared with $0.33 a year ago. Fourth Quarter net revenues rose to $7.8 billion from $7 billion a year ago. Excluding a debt valuation adjustment, net revenues for the current quarter were $8.2 billion. Analysts had been looking for $8 billion. The shares are up 0.9% pre-market.


There's little movement in tech ETFs this morning. Technology Select Sector SPDR ETF (XLK), iShares Dow Jones US Technology ETF (IYW); iShares S&P North American Technology ETF (IGM); iShares S&P North American Technology-Software Index (IGV) and SPDR S&P International Technology Sector ETF (IPK) are unchanged, but remain near the top of their 52-week range.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were flat.

In stocks news, American depositary shares of Wipro Ltd. (WIT) slipped almost 5% in Friday's pre-market session, despite the technology-services outsourcing company's report of fiscal third-quarter earnings slightly above expectations while revenue was in line with Street estimates. For the quarter ended Dec. 31, the company posted earnings from continuing operations attributable to equity holders of 20.1 billion rupees, or 8.18 rupees per share, up from 17.2 billion rupees, or 6.46 rupees per share.


Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) are unchanged so far, despite an uptick in the price of crude this morning.

In corporate news, oil services and equipment supplier Schlumberger Limited (SLB) gained 1% in the pre-market session Friday after reporting Q4 2013 adjusted diluted EPS of $1.35, topping the Capital IQ consensus by $0.02. Year-ago adjusted diluted EPS was $1.04.


Crude was up 0.66%; United States Oil Fund (USO) was up 0.5%. Natural gas is down 0.76% and United States Natural Gas Fund (UNG) has fallen 0.8%.

Gold was up 0.6% and silver was up 0.8%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.5%; iShares Silver Trust (SLV) was up 0.7%.


Consumer Staples Select Sector SPDR (XLP) and other consumer ETFs Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) are showing little movement after a mixed session on Thursday.

In stocks news, shares of Elizabeth Arden (RDEN) are down 21% at a new 52-week low of $27.11 in pre-market trade, coming off an after-hours halt. RDEN said it expects Q2 adjusted EPS of $1.05-$1.08 on sales of $415 million-$418 million, short of the analyst consensus on Cap IQ of EPS of $1.47 on sales of $469 million.