Active broad-market exchange-traded funds in Friday's regular session:
iShares MSCI Emerging Index Fund ( EEM ): -2.4%
SPDR S&P 500 ( SPY ): -1.2%
SPDR Select Sector Fund - Financial ( XLF ): -1%
Invesco QQQ Trust, Series 1 ( QQQ ): -2%
VanEck Vectors Gold Miners ETF ( GDX ): -2.5%
Broad Market Indicators
Broad-market exchange-traded funds, including IWM and IVV were lower. Actively traded PowerShares QQQ ( QQQ ) was down 2%.
US stocks continued to trade in the red at session's half, weighed down by accelerating inflation and its likely impact on Federal Reserve monetary policy, slowing Chinese economic growth and lackluster corporate guidance.
The Federal Open Market Committee on Thursday left its federal funds rate unchanged as expected, though investors are forecasting a 25-basis point increase in December.
In economic news, wholesale prices rose 0.6% in October, well above consensus for a 0.2% gain, which furthers expectations for an interest rate increase at the end of the year. On an annual basis, the producer price index was up 2.9%, topping expectations for a 2.5% improvement. Excluding the volatile food and fuel segment, producer prices were up 0.5% and 2.6% annually, above forecasts for 0.2% and 2.3%, respectively.
In news abroad, soft Chinese auto sales and inflation data and weakness in Spanish banks and European oil drillers and refiners weigh on most bourses across the globe, ending a tumultuous week in the red.
Power Play: Industrial
Select Sector SPDR-Industrial (XLI) was down 1.2%; iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), and Vanguard Industrials (VIS) were also in negative territory.
Finisar (FNSR) said that it had agreed to be acquired by II-VI (IIVI), a provider of optoelectrical components, for approximately $3.2 billion. The transaction, which has been approved by the boards of both companies, values Finisar at $26 per share, or approximately $3.2 billion in equity value and represents a premium of 37.7% to Finisar's closing price on November 8. After the merger has completed, Finisar shareholders will own approximately 31% of the combined company. The combination is expected to drive value creation through scale, technological base and complementary product roadmaps, according to a joint statement issued by the companies on Friday. Some $150 million of expected run-rate cost synergies are expected to be realized within 36 months of close and the transaction is expected to drive accretion in adjusted earnings per share for the first full year post close of approximately 10% and more than double that thereafter. FNSR rose more than 15% while IIVI shares were down some 16%.
Winners and Losers
The Select Financial Sector SPDRs ( XLF ) was down 1%. Direxion Daily Financial Bull 3X shares (FAS) was down 3.1% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was up 3.2%.
MoneyGram International (MGI) fell more than 40% after it reported Q3 adjusted earnings of $0.24 per share, unchanged from the prior year period and higher than the $0.16 per share Street estimate. Total revenue for the quarter was $347.2 million, down from $397.8 million reported for the same period last year and below the $378.7 million Street estimate. For 2018, the company expects revenues to decline by approximately 10% on a constant currency basis vs its previously issued outlook of a decline of 4% to 6%.
Technology Select Sector SPDR ETF (XLK) was down 2.2% and other tech funds iShares Dow Jones US Technology ETF (IYW) and iShares S&P North American Technology ETF (IGM) were in the red.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1.7% and Semiconductor Sector Index Fund (SOXX) was down 2.2%.
Yelp (YELP) slumped 28% after it reported Q3 EPS of $0.17 compared with $0.09 a year earlier. Analysts were expecting earnings of $0.35 per share on a non-GAAP basis and $0.10 per share on a GAAP basis. Revenue was $241 million, compared with $223 million a year earlier, shy of the consensus estimate of $245.6 million, according to Capital IQ. Yelp forecast net revenue for the year of $938 million and $942 million, below the consensus estimate of $963 million. The company is expecting adjusted EBITDA to be between $178 and $180 million for the year.
Dow Jones US Energy Fund (IYE) was down 0.7% and Energy Select Sector SPDR (XLE) was down 0.7%.
Pacific Gas & Electric Co (PCG) fell some 13% after it said it will not proceed with plans Thursday for a Public Safety Power Shutoff in portions of eight Northern California counties, as weather conditions did not warrant this safety measure.
Crude was down 1.3%. United States Oil Fund (USO) was down 1%. Natural gas was down 0.4% while United States Natural Gas Fund (UNG) was up 5%.
Gold was down 0.4%. SPDR Gold Trust (GLD) was down 1.3%. Silver was down 1.1%, while iShares Silver Trust (SLV) was down 1.99%.
Consumer Staples Select Sector SPDR (XLP) was up 0.4% and Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones U.S. Consumer Goods (IYK) were higher.
Consumer Discretionary Select Sector SPDR (XLY) was down 1.6% while retail funds SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) were lower.
Revlon (REV) rose nearly 29% after it reported that it swung to a Q3 adjusted profit of $0.14 per share from a loss of $0.38 per share in the same period a year ago. Capital IQ provided a single estimate for a loss of $0.40 per share. Total revenue of $655.4 million was down from $666.5 million in the same period a year ago but topped a single forecast of $639.6 million. Revlon said it is launching an optimization program designed to streamline operations, reporting structures and business processes. The company expects the actions to be implemented by the end of 2019 and to result in annualized cost reductions of approximately $125 million to $150 million. The company expects to recognize approximately $30 million to $40 million of pre-tax restructuring and related charges and $10 million of additional capital expenditures. Revlon expects to take a Q4 pre-tax restructuring charge of approximately $8 million to $10 million, with the balance to be recognized in 2019.
Health Care SPDR (XLV) was down 0.6% and other health care funds including Vanguard Health Care ETF (VHT) and iShares Dow Jones U.S. Healthcare (IYH) were lower. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down 2.6%.
Aduro Biotech (ADRO) was down more 12% after it reported preliminary data from an ongoing phase 1 dose-finding trial which showed that ADU-S100 was well-tolerated with no dose-limiting toxicities in patients with advanced cancers. The trial also showed preliminary signs of clinical and biomarker activity. "We are encouraged by the data obtained from the dose escalation portion of this first-in-human trial of ADU-S100 in heavily pre-treated patients with a diverse set of advanced cancers," said CEO Stephen T. Isaacs.