Mid-Day ETF Update: ETFs, Stocks Climb Higher as Earnings Season Starts; Dow Pushes Past Record Close, S&P Nears Record Closing High
Active broad market exchange-traded funds at mid-day:
SPDR S&P 500 ( SPY ): +0.26%
iShares MSCI Emerging Markets Index ( EEM ): +1.21%
iShares MSCI Japan Index ( EWJ ): +0.68%, near its 52-week high
iPath S&P 500 VIX Short Term Futures TM ( VXX ): -0.87%, with a 52-week low of $19.32
Financial Select Sector SPDR ( XLF ): +0.47%, near its 52-week high
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM, IVV and others, are mostly firmer. Actively traded PowerShares QQQ (QQQ) was up 0.40%.
U.S. stocks have turned positive at session's half, with the S&P near its record closing high and the Dow Industrials pushing past its record close. Market sentiment has brightened as aluminum company Alcoa's (AA) better-than-expected profit for its Q1 earnings report marked the start of earnings season, although investors are wary of taking its results, whether upbeat or downbeat, as indicators for how the whole earnings season will play out.
Investors are mostly shrugging off the February wholesale inventories data, which came in lower than expected, down 0.3% versus the consensus of 0.5%. Wholesale sales rose 1.7% for the month after slipping 0.8% in the prior month.
Winners and Losers
Select Financial Sector SPDRs ( XLF ) was up 0.47%, near its 52-week high. Direxion Daily Financial Bull 3X shares (FAS) was up 0.84%, with a new 52-week high of 55.46. Its bearish counterpart, FAZ, was down 0.95%, with a new 52-week low of $41.45.
Among financial stocks, FXCM Inc. (FXCM) was up 2.39% after it said earlier that it proposed to merge with and acquire Gain Capital Holdings LLC (GCAP). The proposed transaction would give Gain shareholders 0.3996 shares of FXCM Class A common stock for each share of Gain common stock. FXCM was also prepared to offer up to $50 million in cash consideration in lieu of FXCM shares. FXCM shares are
Tech ETFs were mixed at mid-day trading: Technology Select Sector SPDR ETF (XLK), up 0.13%; iShares Dow Jones US Technology ETF (IYW), 0.21%; iShares S&P North American Technology ETF (IGM), 0.32%; and iShares S&P North American Technology-Software Index (IGV), down 0.01%.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was off 0.02% while Semiconductor Sector Index Fund (SOXX) was up 0.09%.
SPDR S&P International Technology Sector ETF (IPK) was up 0.63%.
In sector news, Affymetrix (AFFX) shares tumbled 13.48% as the company says it expects Q1 FY13 revenues of around $78 million, including revenues of about $19 million from eBioscience - below the company's expectations. The company attributed this to continued headwinds in its gene expression business across all regions, particularly in Japan, where it came in significantly short of plan. Analysts polled by Capital IQ are expecting Q1 revenues of $83.34 million.
Dow Jones U.S. Energy Fund (IYE) was up 0.88%. Energy Select Sector SPDR (XLE) was up 0.93%.
In sector news, Synergy Resources (SYRG) was up 0.28%, near its 52-week high, after it reported Q2 earnings of $0.05 per share, ex one-time items, versus the Capital IQ consensus of $0.06. Revenues were $10.9 million, versus the analyst estimate of $11.53 million. Net oil and natural gas production increased to 186,039 barrels of oil equivalent (BOE), averaging 2,067 BOE per day versus 1,091 BOE per day in the same year-ago quarter.
Crude was up 1.09%, near its session highs; natural gas was down 1.4%. United States Oil Fund (USO) was up 0.2178%. United States Natural Gas Fund (UNG) was down 1.39%.
Gold was up 0.92%. Silver was also higher, up 2.88%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.85%; iShares Silver Trust (SLV) was up 2.81%.
Healthcare ETFs were higher, trading at the higher end of their 52-week ranges: Health Care SPDR (XLV), up 0.37%; Vanguard Health Care ETF (VHT), up 0.23%; and iShares Dow Jones US Healthcare (IYH), up 0.34%. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 0.32%.
In corporate news, BSD Medical (BSDM) was down 28.48% after it entered into a securities purchase agreement with two institutional investors to sell 4,065,042 shares of its common stock in a registered direct offering at $1.23 per share. In addition, warrants to purchase 3,048,782 shares will be issued to the investors. The warrants are exercisable beginning six months and one day after closing, expire five years after becoming exercisable, and have an exercise price of $1.65 per share. The completion of the offering will occur on or before April 12.
Consumer ETFs were lower, but near their 52-week highs: Consumer Staples Select Sector SPDR (XLP), down 0.17%; iShares Dow Jones US Consumer Goods (IYK), down 0.32%; and Vanguard Consumer Staples ETF (VDC), down 0.11%.
In sector news, Herbalife Ltd. (HLF) was down 1.12% after being released from a trading halt earlier. The company confirmed earlier reports that the independent accountant it has engaged, KPMG LLP, has resigned effective immediately. KPMG also confirmed reports that it resigned because its independence was compromised after one of its former partners had been allegedly engaged in insider trading in HLF's securities.
The former KPMG partner was engagement partner on HLF's audit. HLF's Audit Committee and management continue to believe that the company's financial statements covering or the fiscal years ended December 31, 2010, 2011 and 2012, in all material respects, the financial condition and results of operations of the company as of the end of and for the referenced periods and may continue to be relied upon.
Power Play -
Industrial ETFs were lower: Vanguard Industrials (VIS), down 0.03%; iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), down 0.16%; and Select Sector SPDR-Industrial (XLI), down 0.05%.
Among stocks, Alcoa (AA) was down 0.42% after reporting its financial results in Monday's after hours. During its conference call, the company's management issued guidance for 2Q by segment, as follows: Engineered Products and Solution (EPS) ATOI is expected to increase about 5% sequentially; Global Rolled Products (GRP) ATOI is expected to increase 15%-20% sequentially, excluding LME and currency; Alumina is expected to have production increases by 150 kmt, and Primary Metals will have a $25M negative impact owing to power plant outages at Anglesea.
The company also said it has suffered as a result of pricing pressures where supply has outstripped demand. While aluminum was down 10%, this was not reflective of the underlying market dynamics, according to management. The fundamentals tell a different story with stable inventory, and regional premiums still strong. Given the curtailment of supply in China, Alcoa reiterated its expectation for 7% aluminum growth. Excluding China, this would imply 4% growth globally.
Alcoa had reported late Monday Q1 EPS of $0.11, beating analyst estimates of $0.08 EPS. Revenues came in at $5.8 billion, in line with Street forecasts.