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ETF Preview: ETFs, Futures Slip Lower, Break 3-Day Rally Ahead of Fed Policy Decision


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Active broad-market exchange-traded funds ahead of Thursday's regular session:

SPDR S&P 500 ( SPY ): -0.3%

iShares MSCI Emerging Index Fund ( EEM ): -1.4%

SPDR Select Sector Fund - Financial ( XLF ): -0.4%

Invesco QQQ Trust, Series 1 ( QQQ ): -0.6%

ProShares UltraPro Short QQQ ( SQQQ ): +1.7%

Broad Market Indicators

Broad-market exchange-traded funds, including IWM and IVV were lower. Actively traded PowerShares QQQ ( QQQ ) was down 0.6%.

US stock futures were slipping lower ahead of the session's open, halting a three-day rally, as investors turned their attention to the latest monetary policy decision by the Federal Reserve at 2 pm ET. The Federal Open Market Committee is expected to hold its federal funds target range steady at 2% to 2.25%, with an implied target of 2.125%.

In economic data releases, weekly jobless claims fell by 1,000 to 214,000 in the seven days ended Nov. 3 -- the lowest level since the summer of 1973 -- versus Econoday forecasts for the number to decline to 213,000. Continuing claims fell by 8,000 to 1.62 million.

Power Play: Technology

Technology Select Sector SPDR ETF (XLK) was down 0.5% and other tech funds 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 inactive.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were flat.

CommScope Holding (COMM) shares were down more than 12% in pre-market trading on Thursday after the network infrastructure provider reported Q3 results that missed analysts' estimates and said it would acquire the telecom equipment maker Arris International (ARRS) for $7.4 billion.

CommScope (COMM) said it agreed to buy Arris (ARRS) in an all-cash transaction for $31.75 per share and expects to complete the transaction is expected H12019. The per share purchase price represents a premium of approximately 27% to the volume weighted average closing price of Arris common stock for the 30 trading days ended Oct. 23, the day prior to market speculations pertaining to the acquisition, CommScope said. The acquisition will be financed through a combination of cash on hand, borrowings under existing credit facilities and approximately $6.3 billion of incremental debt. Moreover, alternative asset manager the Carlyle Group (CG) has reestablished an ownership position in CommScope through a $1 billion minority equity investment as part of its financing of the transaction, the company added.

CommScope also reported Q3 posted adjusted earnings of $0.59 per share, down from $0.55 per share in same period a year ago and below the Street estimate of $0.66 per share. Revenues came in at $1.15 billion compared with $1.13 billion during the same period in the prior year. The result missed the analyst consensus of $1.22 billion. COMM shares fell nearly 9%.

Meanwhile, Arris reported Q3 adjusted earnings of $0.68 per share, compared with the prior-year period's $0.80 per share. Analysts polled by Capital IQ were expecting EPS of $0.67. Revenue was $1.65 billion, down from $1.73 billion in the same quarter last year. The Street view was for revenue of $1.71 billion. ARRS shares slipped some 9%.

Winners and Losers

Financial

The Select Financial Sector SPDRs ( XLF ) was down 0.3%. Direxion Daily Financial Bull 3X shares (FAS) was flat while its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was up 1.3%.

Brookfield Asset Management (BAM) reported Q3 FFO of $1.07 per share, compared with the prior-year period's $0.79 per share. Analysts polled by Capital IQ were expecting $0.64 FFO per share. Revenue was $14.86 billion, up 21% from $12.28 billion in the same quarter last year. There were no analysts' estimates for revenue available for comparison.

Industrial

Select Sector SPDR-Industrial (XLI) and other funds iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), and Vanguard Industrials (VIS) were quiet.

Kronos Worldwide (KRO) fell some 16% late Wednesday after the company reported Q3 earnings of $0.28 per share, compared with the prior-year period's $0.64 per share. Analysts polled by Capital IQ were expecting EPS of $0.77. Revenue was $410.3 million, down from $464..5 million in the same quarter last year. The single analyst estimate is for revenue of $467 million.

Energy

Dow Jones US Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were both inactive in the pre-market session.

Denbury Resources (DNR) rose more than 4% after the company reported Q3 adjusted earnings of $0.13 per share, compared with the prior-year period's $0.04 per share. Analysts polled by Capital IQ were expecting EPS of $0.11. Revenue was $395 million, up from $266.6 million in the same quarter last year. The Street view is for revenue of $348.4 million.

Commodities

Crude was up 0.1%. United States Oil Fund (USO) was up 0.2%. Natural gas was down 0.8% while United States Natural Gas Fund (UNG) was down 0.4%.

Gold was down 0.3%. SPDR Gold Trust (GLD) was down 0.3%. Silver was down 0.7%, while iShares Silver Trust (SLV) was down 0.9%.

Consumer

Consumer Staples Select Sector SPDR (XLP) and other funds Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were flat.

Consumer Discretionary Select Sector SPDR (XLY) and retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were inactive in pre-market trade.

Wynn Resorts (WYNN) fell more than 14% after it reported adjusted EPS rose to $1.68 in Q3 from $1.52 a year earlier, just ahead of analysts' estimates of $1.67 in a Capital IQ poll. Revenue rose to $1.71 billion from $1.55 billion a year ago, exceeding the $1.67 billion estimate.

Health Care

Health Care SPDR (XLV) was up 0.02% and other health care funds Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were quiet. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was flat.

Voyager Therapeutics (VYGR) plunged 12% after the company said Q3 GAAP loss per share narrowed to $0.63 from a loss of $0.89 in the year-ago period and collaboration revenues rose to $2.1 million from $1.1 million. The CapIQ mean was for GAAP loss of $0.79 per share and sales of $2.95 million. It promoted Allison Dorval to the position of chief financial officer from her previous position as vice president of finance. Separately, it reported positive longer-term results from the open-label, dose-escalating Phase 1b trial of VY-AADC demonstrating sustained improvements in patients' motor function. Patients in the two highest dose cohorts (Cohorts 3 and 2) experienced mean improvements in diary on-time without troublesome dyskinesia (good ON time) of 1.7 hours per day at 18 months and 2.7 hours per day at two years, respectively.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.



This article appears in: Investing , ETFs
Referenced Symbols: SPY , EEM , XLF , QQQ , SQQQ



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