Mid-Day ETF Update: ETFs, Shares Pummeled, Tracking Chinese Stocks - China Tightens Grip to Prevent RE Bubble
Active broad-market exchange-traded funds at mid-day:
SPDR S&P 500 ( SPY ): -0.2%
iPath S&P 500 VIX Short Term Futures TM ( VXX ): -1.6%
iShares MSCI Emerging Markets Index ( EEM ): -1.3%
iShares MSCI Japan Index ( EWJ ): +0.2%, with a new 52-week high of $10.34
Financial Select Sector SPDR ( XLF ): +0.11%, near 52-week highs.
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM, IVV and others, retained losses in mid-day trading. Actively traded PowerShares QQQ (QQQ) was down -0.1%.
U.S. stocks slipped further into the red, tracking mainland Chinese stocks, as China's Shanghai Composite Index suffered its worse day since August 2011, while the Shenzhen Composite Index saw its sharpest decline since July, according to MarketWatch.
Real Estate and construction stocks plunged after the Chinese government said it will tighten regulatory measures to control the sharp rise in real estate prices, preventing what could be a real-estate bubble. Back home, U.S. federal spending cuts took effect after a deadlock in Washington failed to avert the sequester cuts. MarketWatch reported that following the cuts, analysts trimmed their GDP forecasts.
Winners and Losers
Select Financial Sector SPDRs ( XLF ) turned positive and was up 0.1%, near its 52-week high. Direxion Daily Financial Bull 3X shares (FAS) was up 0.7%. Its bearish counterpart, FAZ, turned negative and was down 0.6%, near its 52-week low.
Among financial stocks, HSBC Holdings plc (HBC) was down about 2% after reporting a FY12 profit of $13.5 bln, down from $16.2 bln a year earlier, missing analyst expectations. The bottom line was affected by London-based HBC in December agreed to a record $1.92 bln fine to settle charges with U.S. authorities the bank breached rules against money laundering, including allegations it handled money transfers worth billions of dollars for countries under U.S. sanctions.
Tech ETFs Technology were mixed: Select Sector SPDR ETF (XLK) is flat; iShares Dow Jones US Technology ETF (IYW), down 0.2%; iShares S&P North American Technology ETF (IGM), now down 0.03%; and iShares S&P North American Technology-Software Index (IGV), up 0.4%.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.5% and Semiconductor Sector Index Fund (SOXX) was down 0.7%.
SPDR S&P International Technology Sector ETF (IPK) was down 0.86%.
In sector news, Tech Data Corp. (TECD) slipped more than 7% after posting fourth quarter earnings per share of $1.48, shy of the $1.76 consensus estimate. Revenues for the quarter totaled $7.5 billion, better than analyst estimate of $7.2 billion. Year-ago earnings per share was $1.75, with revenues of $7.1 billion.
Dow Jones U.S. Energy Fund (IYE) was down 0.9% and Energy Select Sector SPDR (XLE) was off 0.8%.
In sector news, GMX Resources (GMXR) tumbled 18%, but has trimming earlier losses of some 38%, following the company's receipt of a non-compliance notice from the NYSE for failure to reach $50 million in market cap for 30 consecutive trading days. GMXR has 45 days to submit a plan to the NYSE detailing how it intends to comply with the NYSE's listing standards.
Crude was down 0.94%; natural gas was up 1.86%. United States Oil Fund (USO) was down more than 1%. United States Natural Gas Fund (UNG) was up 2%.
Gold was down 0.01% and silver was up 0.04%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.2%; iShares Silver Trust (SLV) was down 0.3%.
Among stocks, Hecla Mining Company (HL) slipped around 12% after announcing that it signed a deal with Aurizon Mines Ltd. (AZK) in which Hecla will acquire all of the issued and outstanding common shares of Aurizon in a transaction with a total value of approximately C$796 million. Hecla will acquire all of the outstanding common shares of Aurizon for C$4.75 per share. Each holder of Aurizon common shares may elect to receive either C$4.75 in cash or 0.9953 of a Hecla share. AZK shares were up about 4%.
Healthcare ETFs were in and around new 52-week highs: Health Care SPDR (XLV), was up 0.05%, with a new 52-week high of $43.88; Vanguard Health Care ETF (VHT), was up 0.17%, with a new 52-week high of $78.80; and iShares Dow Jones US Healthcare (IYH), was up 0.02%, with a new 52-week high of $91.66. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 0.4%, earlier jumped to a new 52-week high of $150.13.
In corporate news, Prana Biotechnology (PRAN) was up nearly 13% after it reported that its Alzheimer's Disease treatment, PBT2, has shown the ability to reduce the damage to brain cells, caused by the accumulation of the tau protein and preventing subsequent cognitive impairment. The tau protein, is one of two major proteins associated with Alzheimer's Disease. Pran's Phase II clinical trial for PBT2, the IMAGINE trial, is now fully enrolled and will be completed at the end of the year.
Consumer ETFs were inching higher at mid-day, nearing their 52-week highs: Consumer Staples Select Sector SPDR (XLP), up 0.21%; iShares Dow Jones US Consumer Goods (IYK), up 0.05%; and Vanguard Consumer Staples ETF (VDC), up 0.24%.
In sector news, Standard Motor Products (SMP) was up 5%, touching a new 52-week high of $26.86, after it reported Q4 earnings of $0.28 per share, ex one-time items, versus the Capital IQ consensus of $0.21. Revenues were $192.4 mln, versus the analyst estimate of $191.44 mln. The company said it will commence a new share buyback program of $6 million for 2013. This is in addition to its outstanding authorization carry forward of $864,000 from 2012. It has also raised its quarterly dividend from $0.09 to $0.11, effective March 1.
Power Play -
Industrial ETFs continued to weaken: Vanguard Industrials (VIS), down 0.39%; iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), down 0.42%; Select Sector SPDR-Industrial (XLI), down 0.75%; iShares Dow Jones US Home Construction (IB),
Among stocks, Ferro Corporation (FOE) was down more than 30% after Schulman (SHLM) proposed to acquire all of the outstanding shares of FOE's common stock for $6.50 per share, representing an estimated total enterprise value of about $855 million including total indebtedness. The offer represents a 25% premium over the closing price of FOE common stock on March 1, 2013, and a 32% premium over the volume-weighted average trading price over the preceding 60-day period. SHLM shares were flat.