Mid-Day ETF Update: ETFs, Stocks Take Back Most of Earlier Losses; Homebuilder Confidence, Cyprus Bailout Concerns Still Weigh
Active broad market exchange-traded funds at mid-day:
SPDR S&P 500 ( SPY ): -0.30%
iPath S&P 500 VIX Short Term Futures TM ( VXX ): +2.14%
iShares MSCI Emerging Markets Index ( EEM ): -0.65%
Financial Select Sector SPDR ( XLF ): -0.89%
ProShares Trust II ( UVXY ): +4.67%
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM, IVV and others, pared earlier losses but were still weaker. Actively traded PowerShares QQQ (QQQ) inched up 0.02%.
U.S. stocks also regained most of their earlier losses but were still in negative territory. Downbeat economic news also weighed on stocks, with the NAHB Housing Market Index for March showing a reading of 44, and missing economists' expectations of a reading of 46, according to Briefing.com.
Earlier, market sentiment took a beating, tracking European and Asian markets lower, after Cyprus announced it will impose a levy on bank deposits as part of a financial bailout. Voting regarding the bailout and the bank levies was reportedly delayed for another day, dampening sentiment further.
Winners and Losers
A number of Tech ETFs inched up at mid-day: Technology Select Sector SPDR ETF (XLK), up 0.17%; and iShares Dow Jones US Technology ETF (IYW), up 0.35%. On the other hand, iShares S&P North American Technology ETF (IGM) and iShares S&P North American Technology-Software Index (IGV) were down 0.30% and 0.19%, respectively.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.28% and Semiconductor Sector Index Fund (SOXX) was down 0.54%.
SPDR S&P International Technology Sector ETF (IPK) eased 1%.
In sector news, ChipMOS Technologies (IMOS) climbed 8.07%, adding to earlier gains of some 4%, after reporting Q4 GAAP earnings of $0.30 per share, versus the Capital IQ GAAP consensus of $0.28. Revenues were $167.6 mln, versus the analyst estimate of $168.25 mln. The company said that it expects revenue for Q1 FY13 to be lower sequentially by 9% to 13%.
Separately, the company's board of directors has approved a new repurchase program of up to $7.5 million of the company's common shares. The company expects the repurchase program to commence in Q2 of 2013, with acquired shares being retired and cancelled. The board also approved the listing of its subsidiary ChipMOS TECHNOLOGIES INC., a Taiwan corporation, on Taiwan's Emerging Stock Market.
Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were in the red in mid-day action, down 0.20% and 0.28%, respectively.
In sector news, Transocean (RIG) trimmed earlier losses and was down 0.15% after it announced Monday that its board has reviewed the proposals submitted by certain funds affiliated with Carl Icahn for vote at its 2013 Annual General Meeting of Shareholders. Icahn had proposed a dividend of $4.00 per share and nominated three candidates for election to Transocean's board, as well as submitting a proposal to repeal the company's staggered board structure.
The board said it has determined that Icahn's dividend proposal is in direct conflict with Transocean's capital allocation strategy and that it believes the dividend proposed by Icahn would adversely affect the company's ability to operate and compete effectively in a cyclical and capital-intensive industry. The board urged company shareholders to reject the activist investor's proposal.
Crude dipped lower, down 0.14%; natural gas was up 1.18%. United States Oil Fund (USO) was up 0.15%. United States Natural Gas Fund (UNG) was up 1.51%.
Gold was up 0.80% and silver was up 0.10%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.97%; iShares Silver Trust (SLV) was up 0.68%.
Consumer ETFs have slipped into the redat mid-day: Consumer Staples Select Sector SPDR (XLP), down 0.32%, but near the 52-week high of $38.89; iShares Dow Jones US Consumer Goods (IYK), down 0.30%; and Vanguard Consumer Staples ETF (VDC), down 0.31%.
In sector news, Fiesta Restaurant Group Inc. (FRGI) was down 2.84% after it announced the launch of a proposed secondary public offering of 2.5 million shares of common stock. All shares will be offered by funds managed by Jefferies Capital Partners. The selling shareholders also granted the underwriters an option to purchase up to an additional 375,000 shares of common stock.
Healthcare ETFs continued to weaken: Health Care SPDR (XLV), down 0.20%; Vanguard Health Care ETF (VHT), down 0.31%; and iShares Dow Jones US Healthcare (IYH); down 0.19%. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was also lower, off 0.44%.
In corporate news, Palomar Medical Technologies (PMTI) climbed up 5.15%, but off the new 52-week high of $13.42, after it said it signed an agreement to be acquired by Cynosure (CYNO) in a cash and stock transaction valued at approximately $294 million. PMTI shareholders will receive $13.65 per share of PMTI common stock: $6.825 per share in cash and $6.825 per share in CYNO common stock (subject to adjustment and collar provisions described in the definitive agreement).
CYNO will issue about 5.2 million shares in the transaction. The acquisition price of $13.65 represents a premium of 23% above PMYI's average closing price and a premium of 34% over PMTI's average enterprise value (excluding cash) since the announcement of PMTI's 2012 year-end results on Feb. 7, 2013. The acquisition is expected to be accretive to CYNO in 2014 with the implementation of $8 mln - $10 mln in projected synergies. CYNO shares are down 3.06%.
Power Play -
Financial stocks and ETFs trimmed losses but stayed put in the negative territory, bearing the brunt of the weakness from concerns sparked by Cyprus' bailout news.
Select Financial Sector SPDRs ( XLF ) was down 0.89%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.52%. Its bearish counterpart, FAZ, was up 1.74%.
Among financial stocks, UBS (UBS) was down 1.4% after it agreed to buy the municipal bond trustee business from Deutsche Bank AG (DB), adding another $57 billion to the $3 trillion in assets now under administration by USB's corporate-trust division. Financial terms of the deal were not disclosed. DB shares were down 2.64%.