Mid-Day ETF Update: ETFs, Stocks Lower After Four Days of Gains; Upbeat Wholesale Inventories, JOLTS Data Temper Losses
Active broad-market exchange-traded funds in Tuesday's regular session:
SPDR S&P 500 ( SPY ): -0.21%
iShares Russell 2000 Index ( IWM ): -0.80%
iShares MSCI Emerging Markets Index ( EEM ): +0.26%
PowerShares QQQ Trust, Series 1 ( QQQ ): -0.05%, near its 13-year high
Direxion Daily Small Cap Bear 3X Shares ( TZA ): +2.24%
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM and IVV were lower but some were still near their record or multi-year highs. Likewise, actively traded PowerShares QQQ ( QQQ ) was down 0.05%, near its 13-year high.
U.S. stocks were slipping into negative territory at session's half, taking a pause after a record-breaking run, although losses were kept in check by upbeat economic data. Earlier, the Commerce Department reported that U.S. wholesale inventories rose 1.1% in April; wholesale sales rose 1.3%. Both topped forecasts. Meanwhile, the Labor Department also reported that U.S. hiring rose to 4.71 million hires in April - the fastest monthly pace since June 2008. The U.S. JOLTS report also showed job openings climbed 289,000 to 4.46 million in April, from a revised 41,000 increase to 4.17 million in March.
Power Play: Technology
Technology Select Sector SPDR ETF (XLK), iShares Dow Jones US Technology ETF (IYW) and iShares S&P North American Technology ETF (IGM) were lower, and but earlier hit multi-year highs; iShares S&P North American Technology-Software Index (IGV) was weaker. SPDR S&P International Technology Sector ETF (IPK) was down 0.64%.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) edged to a record high, up 0.45% while Semiconductor Sector Index Fund (SOXX) was up 0.07%, and was near the record high it hit in the previous session,
In corporate news, eBay (EBAY) shares were down 2%, and near their 52-week low after announcing late Monday PayPal president David Marcus will leave the company to lead Facebook's (FB) messaging products. The provider of online shopping and payment services said the current leadership team at PayPal will report to Ebay CEO John Donahoe until a successor can be named. It said PayPal is on track to meet its 2015 targets. FB shares gained nearly 4%.
Winners and Losers
Select Financial Sector SPDRs (XLF) was down 0.28%, near multi-year highs. Direxion Daily Financial Bull 3X shares (FAS) was down 0.76%. Its bearish counterpart, FAZ, was up 0.79%, hitting a record low.
Among sector news, Russian payment services provider QIWI (QIWI) is down 6% after it said it plans to sell 7,973,330 of its class B shares to raise money for working capital and other purposes, including potential acquisitions. QIWI said 1,993,330 shares, represented by ADSs, are being sold by the company and 5.98 million by selling shareholders. Underwriters will have an option to purchase up to an additional 299,000 Class B Shares from the company and 897,000 from the selling shareholders. The company also announced that Boris Kim was elected as chairman of the board. Kim has been a member of QIWI's board of directors since 2013.
Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) slipped lower but were still near their record highs.
Retail ETFs SPDR S&P Retail (XRT), Market Vectors Retail ETF (RTH), and PowerShares Dynamic Retail (PMR) were also weaker.
Among stocks, Francesca's Holdings (FRAN) was down 14% after the operator of retail boutiques posted Q1 net income of $8.6 million, or $0.20 per share from $10.9 million, or $0.24 per share a year ago and below the consensus for $0.22, according to analysts polled by Capital IQ. Total sales rose 8% to $85.4 million, below forecasts for $88.2 million.
For the second quarter ending August 2, 2014, net sales are expected to be between $98 million and $103 million assuming a mid to low single digit decrease in comparable sales, below estimates for $104 million. EPS are expected to be in the range of $0.24 to $0.29. Second quarter guidance reflects the company's plans to dispose of slow moving inventory at a pretax cost of between $2.5 million to $3.5 million, or $0.04 to $0.05 per diluted share. Analysts were looking for $0.36. For the full year, net sales are now expected to be in the range of $387 million to $399 and EPS is seen in a range of $1.05 to $1.17. Analysts expected revenue of $398 million with EPS of $1.21.
Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were lower, but near record highs.
Among stocks, Endeavour International (END) was up 72% after it raised production guidance and said it knew of no reason for the recent decline in its share price. Endeavor raised its Q2 production guidance to 10,500 to 11,500 barrels of oil equivalent per day from 9,000 to 10,000 barrels of oil equivalent per day. The oil and gas company attributed the increase to consistent rates of production from three new facilities in the U.K.
Crude was down 0.05%; United States Oil Fund (USO) was down 0.05%. Natural gas was down 1.57% and United States Natural Gas Fund (UNG) was down 1.71%.
Gold was up 0.56% and silver was up 0.65%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.60% and iShares Silver Trust (SLV) was up 0.60%.
Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were lower. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 0.13%.
In corporate news, Achillion Pharmaceuticals (ACHN) climbed 52% after it said it has begun dosing ACH-3422, a uridine-analog nucleotide polymerase inhibitor, for seven days in patients with genotype 1 chronic hepatitis C viral infection (HCV) in its ongoing Phase 1 clinical trial. Proof-of-concept results from the trial are expected to be reported during the fall of 2014. The company has also announced that the U.S. Food and Drug Administration (FDA) has removed the clinical hold on sovaprevir, an NS3/4A protease inhibitor, to permit trials in patients with HCV. Sovaprevir doses of 200 mg once daily, the previously evaluated dose that was well-tolerated with clinical activity in two completed Phase 2 studies, may be used in additional therapeutic clinical trials.