Mid-Day ETF Update: ETFs, Stocks Slip Lower on Mixed Economic Data, Disappointing Earnings Reports
Active broad-market exchange-traded funds at Friday's regular session:
SPDR S&P 500 ( SPY ): -0.07%, but still near its all-time high.
Select Financial Sector SPDRs ( XLF ): +0.14%, near its five-year high
iShares MSCI Emerging Markets Index ( EEM ): -0.36%.
PowerShares QQQ Trust, Series 1 ( QQQ ): -0.15%, but still near its 13-year highs.
iShares MSCI Japan ( EWJ ): +0.54%, near its five year high
Broad Market Indicators
Broad market exchange-traded funds slipped into negative territory, but most were still near the record or multi-year highs. Actively traded PowerShares QQQ ( QQQ ) was weaker, but was still near its 13-year high of $88.49.
U.S. stocks were also in the red following disappointing financial reports, most notably from Intel (INTC) and UPS (UPS). Mixed economic data released earlier also weighed on market sentiment. The Commerce Department reported that housing starts fell 9.8% during December to a seasonally adjusted annual pace of 999,000, which missed estimates calling for only a 0.2% decline. Industrial production during December, on the other hand, rose 0.3% - the fifth month in a row factory output rose and capping the strongest quarter since 2010. The Reuters/University of Michigan index of consumer sentiment fell to a preliminary 80.4 reading in January, missing estimates. Finally, November job openings rose to 4 million, the highest level since March 2008.
Power Play: Healthcare
Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) continued to outperform the broader market, and reached fresh record highs. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 0.81% and also reached an all-time high.
In corporate news, Oncomed Pharmaceuticals (OMED) was up 7% after it reported encouraging results from its ongoing Phase 1b clinical trial of demcizumab (OMP-21M18; anti-DLL4) in first-line Stage IV pancreatic cancer patients. The clinical-stage company said it will proceed into a Phase 2 clinical study for demcizumab in combination with gemcitabine and Abraxane (nab-paclitaxel) in 2014. Results from the Phase 1b clinical trial show that demcizumab in combination with Abraxane and gemcitabine was generally well tolerated. The company also said that the triple drug combination has shown early indications of notable anti-cancer activity. Demcizumab is part of OncoMed's collaboration with Celgene Corporation (CELG). CELG shares were up 0.46%.
Winners and Losers
Select Financial Sector SPDRs ( XLF ) was down 0.61%, but still near its highest level since May 2008. Direxion Daily Financial Bull 3X shares (FAS) was down 0.43%. Its bearish counterpart, FAZ, was down 0.47% and was near an all-time low.
Among financial stocks, Morgan Stanley (MS) was up 4.09% and hit a five-year high of $33.52 after the bank posted adjusted Q4 earnings of $0.50, topping expectations for $0.45 on Capital IQ. The adjusted figures exclude the impact of a debt valuation adjustment, legal charges and tax items. On a GAAP basis EPS were $0.07 compared with $0.33 a year ago. Q4 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.
Technology Select Sector SPDR ETF (XLK) was down 0.14%. Likewise, iShares Dow Jones US Technology ETF (IYW), iShares S&P North American Technology ETF (IGM) and iShares S&P North American Technology-Software Index (IGV) were weaker, but still trading at the higher end of their 52-week highs. SPDR S&P International Technology Sector ETF (IPK) was flat.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were weaker.
In stocks news, NII Holdings Inc. (NIHD) climbed some 23% after the mobile communication services company disclosed it has signed an agreement with Apple (AAPL) to bring the iPhone 5s and iPhone 5c to Nextel Brazil customers beginning January 31, 2014. AAPL shares were down 1.05%.
Dow Jones U.S. Energy Fund (IYE) was flat, while Energy Select Sector SPDR (XLE) was up 0.55%.
In corporate news, oil and gas company RSP Permian, Inc. (RSPP) said late Thursday that its initial public offering of 20 million common shares will be sold at $19.50 per share. The offering is comprised of 9.225 million shares from the company and 10.775 million from the selling shareholders, who were named in the registration statement. Net proceeds from the offering of approximately $166 million will be used to pay debt, fund the company's capital expenditure plan, and pay existing investors and employees.
Crude was up 0.44%; United States Oil Fund (USO) was up 0.33%. Natural gas was down 1.32%, near its 52-week high and United States Natural Gas Fund (UNG) was down 1.13%.
Gold was up 1.07% and silver was up 1.65%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.93%; iShares Silver Trust (SLV) was up 1.40%.
Consumer Staples Select Sector SPDR (XLP) was down 0.50%; other consumer ETFs Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were also lower.
In stocks news, Elizabeth Arden (RDEN) were down 13.83% at a new 52-week low after the beauty products company 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. The company says results were impacted by higher promotional and discounted activity in the retail sector and weaker-than-expected holiday retail sales.