Active broad-market exchange-traded funds in Wednesday's regular session:
SPDR S&P 500 ( SPY ): +1.6%
iShares MSCI Emerging Index Fund ( EEM ): +1.5%
SPDR Select Sector Fund - Financial ( XLF ): +0.5%
Invesco QQQ Trust, Series 1 ( QQQ ): +2.6%
ProShares UltraPro Short QQQ ( SQQQ ): -7.4%
Broad Market Indicators
Broad-market exchange-traded funds, including IWM and IVV were higher. Actively traded PowerShares QQQ ( QQQ ) was up 2.6%.
US stocks extended gains into the session's half, as mid-term elections results, which fell largely in line with expectations, ignited a risk rally across all sectors of the S&P 500 with health care and technology outperforming. Powered by talk of increased spending on infrastructure, the Dow lunged more than 400 points higher at midday to a four-week high.
Election results -- which split Congress into a Democratic House and Republican Senate -- were viewed as bullish for Wall Street as they keep intact recent corporate tax cuts and pro-growth economic policies even as odds are now raised for a government shutdown. Health care spending will likely increase under a Democratic house, while new business regulations inevitably will be blocked by a Republican-controlled Senate. Additionally, Senate Majority Leader Mitch McConnell assured voters that he will work closely with incoming house speaker Nancy Pelosi to approve infrastructure projects.
Additionally, special ballot measures in California, Michigan and Missouri gave a boost to cannabis and dialysis provider stocks, while voters in Colorado decided on initiatives concerning oil and gas development.
Meanwhile, the Mortgage Bankers' Association application index sank 4.0% in data released earlier, to the lowest level in nearly four-years as mortgage rates continued to creep up. In addition, there was a 5.0% drop in the purchase index and a 2.5% dip in the refinancing index for the week ended Nov. 2.
Power Play: Consumer
Consumer Staples Select Sector SPDR (XLP) was up 0.3% and Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones U.S. Consumer Goods (IYK) were firmer.
Consumer Discretionary Select Sector SPDR (XLY) was up 1.6% while retail funds SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) were higher.
Coty, (COTY) fell 22% after calling its results in the fiscal first quarter "a disappointing setback" as it faced supply chain disruptions, bringing in revenue for the period that was below Wall Street's expectations. The company said first quarter revenue fell 9.2%, or 7.7% on a like-for-like basis that adjusts for new or divested businesses, to $2.03 billion, missing the consensus on Capital IQ for $2.17 billion. Adjusted earnings unexpectedly rose to $0.11 a share from $0.10 a year earlier; analysts were looking for a decline to $0.08. Supply-chain problems included warehouse and planning center consolidation disruptions in the US and Europe, the impact of Hurricane Florence which "significantly impacted" its plant in North Carolina, and component shortages from certain suppliers.
Winners and Losers
The Select Financial Sector SPDRs ( XLF ) was up 0.5%. Direxion Daily Financial Bull 3X shares (FAS) was up 2.7% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was down 2.7%.
Colony Capital, Inc (CLNY) rose 5.5% after it said Richard Saltzman resigned as chief executive officer and was replaced by company founder and Executive Chairman Thomas Barrack. Colony said Saltzman and the board "reached a mutual agreement" whereby Saltzman resigned. The company also disclosed that it will leave some non-core businesses and a cost-cutting plan to in a bid for $50 million to $55 million in annual cost savings. Darren Tangen, the company's chief financial officer, was named president and will quit as CFO at the beginning of the year. Mark Hedstrom, the chief operating officer, will take on the CFO duties.
Separately, Colony reported core Q3 FFO of $0.19 a share. Funds from operations was $0.14 per share. Analysts expected FFO of $0.17 per share, according to data compiled by Capital IQ. Revenue for the quarter was $674.8 million, down from $789.9 million reported for the same period last year but still came in just higher than the $673.2 million Street estimate.
Technology Select Sector SPDR ETF (XLK) was up 2.4% and other tech funds iShares Dow Jones US Technology ETF (IYW) and iShares S&P North American Technology ETF (IGM) were in the green.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 1.6% and Semiconductor Sector Index Fund (SOXX) was up 1.1%.
DXC Technology Company (DXC) fell nearly 16% after it reported adjusted EPS rose to $2.02 in Q2 from $1.67 a year earlier, exceeding analysts' estimates of $1.94 in a Capital IQ poll. Revenue fell to $5.01 billion from $5.45 billion a year ago, lagging the $5.30 billion estimate.
Dow Jones US Energy Fund (IYE) was up 0.8% and Energy Select Sector SPDR (XLE) was up 0.8%.
Cimarex Energy Co (XEC) rose nearly 9% after it reported late Tuesday Q3 revenue of $591.5 million, compared with $463.7 million in the year-ago quarter. Analysts polled by Capital IQ were expecting revenue of $561.67 million. Net income for the quarter ended Sept. 30 was $1.99 per share, compared with $1.09 per share in the year-ago period. Analysts were expecting EPS of $1.56.
Crude was down 0.6%. United States Oil Fund (USO) was down 0.6%. Natural gas was down 0.4% while United States Natural Gas Fund (UNG) was up 0.2%.
Gold was up 0.3%. SPDR Gold Trust (GLD) was up 0.1%. Silver was up 8%, while iShares Silver Trust (SLV) was up 0.3%.
Health Care SPDR (XLV) was up 2.8% and other health care funds including Vanguard Health Care ETF (VHT) and iShares Dow Jones U.S. Healthcare (IYH) were firmer. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 2%.
Shares of DaVita (DVA) and Fresenius Medical Care (FMS) were both trading sharply higher after California voters rejected Proposition 8, the "Fair Pricing for Dialysis Act." The ballot initiative would have limited profits that healthcare providers could make from kidney dialysis and regulated the amount outpatient kidney dialysis clinics could charge for treatment. Special interests on both sides contributed approximately $130 million during the campaign with as much as $99 million coming from DaVita, Fresenius and privately-owned US Renal Care. DVA shares rose more than 10% and FMS shares rose more than 9%.