Mid-Day ETF Update: ETFs Firmer, Stocks Higher on Budget Optimism Following Obama, Boehner Meeting
Active broad-market exchange-traded funds at mid-day:
SPDR S&P 500 ( SPY ): +0.9%
Financial Select Sector SPDR ( XLF ): +1.7%, near year highs.
PowerShares QQQ Trust, Series 1 ( QQQ ): +1%
iShares MSCI Emerging Markets Index ( EEM ): +0.14%
iShares Russell 2000 Index ( IWM ): +1%
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM, IVV and others, continue to be firmer. Actively traded PowerShares QQQ ( QQQ ) is up 1%.
U.S. stocks are logging further gains with the financials sector leading a mid-day rally, as market sentiment rides high on hopes that a budget deal can be reached and the so-called fiscal cliff can be avoided. Investors are optimistic as the latest meeting between President Barack Obama and House Speaker John Boehner concluded today. While no comment from either side has been released, some progress in the budget talks was gleaned over the weekend following Boehner's comments that he would accept higher taxes on the rich if spending for "entitlement" programs such as Medicare and Social Security were kept in check, according to media reports. Most investors also largely snubbed the report that the Empire State manufacturing index remained in negative territory for the fifth month in a row.
Winners and Losers
Select Financial Sector SPDRs ( XLF ) is up 1.7%, near year highs. Direxion Daily Financial Bull 3X shares (FAS) is up 4.4%. Its bearish counterpart, FAZ, is down 4.4% and has hit new 52 week lows
Among financial stocks, KCAP Financial (KCAP) is up 9% and closing in on 52 week highs after the company's board of directors approved a quarterly cash dividend of $0.28 per share of common stock, up from the previous dividend of $0.24. The new dividend is payable on Jan. 28, 2013 to shareholders of record at the close of business as of Dec. 28, 2012.
Dow Jones U.S. Energy Fund (IYE) is up 0.7%; Energy Select Sector SPDR (XLE) is up 0.7%.
In sector news, Cheniere Energy Partners' (CQP) subsidiary, Sabine Pass Liquefaction, has signed a liquefied natural gas sale and purchase agreement with Total's (TOT) wholly owned subsidiary, Total Gas & Power North America, under which TOT will purchase 91.25 million MMBtu of liquefied natural gas plus 13.5 million MMBTU of seasonal liquefied natural gas volumes upon the commencement of train five operations. The purchase will be on an FOB basis, with the liquefied natural gas loaded onto TOT's vessels, for a purchase price indexed to the monthly Henry Hub price plus a fixed component. Sabine Liquefaction is currently developing five liquefaction trains adjacent to the Sabine Pass liquefied natural gas terminal. CQP shares are up near 5% while TOT shares are up 1.2%.
Crude was up 0.84%; natural gas was up 1.09%. United States Oil Fund (USO) is up 0.6%. United States Natural Gas Fund (UNG) is up 1.3%.
Gold was down 0.05% and silver was down 0.17%. Among rare metal funds, SPDR Gold Trust (GLD) is up 0.05%; iShares Silver Trust (SLV) is down 0.13%.
Healthcare ETFs are firmer, some nearing 52 week highs: Health Care SPDR (XLV), up 0.6%; Vanguard Health Care ETF (VHT), up 0.68%; and iShares Dow Jones US Healthcare (IYH), up 0.6%. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is up 0.7%.
In corporate news, GenVec (GNVC) is up 38% at around $1.80 but off a day higher $2.05 after the company earlier reported that a single administration of its genetic vaccine was effective against Herpes Simplex Virus or HSV2 in two industry-accepted HSV disease models. The company added that immunization was shown to reduce viral shedding, and the recurrence and severity of lesions. The data was presented at the Keystone Symposia meeting on Immunological Mechanisms of Vaccination, which is taking place in Ottawa, Ontario from Dec. 13 to 18, 2012.
Consumer ETFs are higher, edging close to their 52-week highs: Consumer Staples Select Sector SPDR (XLP), up 0.25%, near year highs; iShares Dow Jones US Consumer Goods (IYK), up 0.52%, near year highs; and Vanguard Consumer Staples ETF (VDC), up 0.3%.
In sector news, Caribou Coffee Company (CBOU) is up 30% after the coffeehouse operator and the Joh. A. Benckiser Group (JAB) announced a definitive merger agreement under which an affiliate of JAB will acquire Caribou for $16.00 per share in cash, or a total of approximately $340 million. The agreement, which has been unanimously approved by Caribou's independent directors, represents a premium of approximately 30 percent over Caribou's closing stock price on December 14, 2012, the last trading day prior to the announcement of the transaction.
Power Play -
Tech ETFs are firmer: Technology Select Sector SPDR ETF (XLK), up 0.8%; iShares Dow Jones US Technology ETF (IYW), up 0.95%; iShares S&P North American Technology ETF (IGM), up 1.1%; and iShares S&P North American Technology-Software Index (IGV), up 1.2%.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) is up 0.18% and Semiconductor Sector Index Fund (SOXX) is up 0.33%.
SPDR S&P International Technology Sector ETF (IPK) is up 0.30%, near year highs.
In sector news, Sprint (S) has turned slightly negative, paring pre-market gains of more than 1%, after it agreed to acquire the approximately 50% stake in the company it does not currently own for $2.97 per share, equating to a total payment to Clearwire shareholders, other than Sprint, of $2.2 billion.