Closing ETF Report: ETFs, Stocks Extend Losses as Market Jitters Over Fed Rate Hike, Government Shutdown Persist

Active broad-market exchange-traded funds in ahead of the close of Monday's regular session:

SPDR S&P 500 ( SPY ): -2%

SPDR Select Sector Fund - Financial ( XLF ): -1.9%

ProShares UltraPro Short QQQ ( SQQQ ): +4.9%

Invesco QQQ Trust, Series 1 ( QQQ ): -1.7%%

iShares MSCI Emerging Index Fund ( EEM ): -0.6%

Broad Market Indicators

Broad-market exchange-traded funds, including IWM and IVV were lower. Actively traded PowerShares QQQ ( QQQ ) was down 1.7%.

US stocks continued to trade in the negative territory at session's half, with the Dow Industrials declining some 400 points and both the Nasdaq and S&P 500 also lower. Ahead of the Christmas holiday, Wall Street is struggling with multiple issues -- the Federal Reserve's tighter monetary policy and the partial government shutdown, as well as Treasury Secretary Steven Mnuchin's attempt to assuage market jitters.

There have been rumors that President Donald Trump could fire Federal Reserve Chairman Jerome Powell after last week's interest rate hike, but Mnuchin denied this, saying the president did not suggest dismissing Powell.

Mnuchin has also been in the headlines after he said that he held individual calls with the CEOs of the nation's six largest banks in which the heads confirmed they have "ample" liquidity available for lending to consumers, business markets, and all other market operations. The move comes after the decline in US stocks last week set them up for the biggest slump in December since the 1930s. However, the move did not calm down the market as fears over slowdown in growth continued especially since Nasdaq entered bear territory last Friday, leaving investors wondering if the two other major US indexes will follow.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) saw investors pull $1 billion in the last week, Bloomberg reported, which was the second biggest outflow this year as the Dow had its worst week in a decade.

In economic data news, the November reading of the Chicago Fed National Activity index came in at 0.22, versus the previous reading of 0.24.

Power Play: Technology

Technology Select Sector SPDR ETF (XLK) was down 2.2%, while 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%.

Mindbody (MB) rose nearly 67% after the maker of apps that are used by fitness and beauty companies for services like client bookings and promotions, is being acquired by Vista Equity Partners in a $1.9 billion deal. Mindbody shareholders will get $36.50 per share in cash in the deal, a 68% premium to the company's unaffected closing price as of Dec. 21, according to a statement Monday. The transaction is expected to close in the first quarter of 2019.

Winners and Losers


The Select Financial Sector SPDRs ( XLF ) was down 1.4%. Direxion Daily Financial Bull 3X shares (FAS) was down 4.9% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was up 5%.

Ares Management (ARES) was down 0.9% after it said late Friday it has acquired three operating utility-scale wind facilities in Texas from BP's (BP) Wind Energy North America subsidiary for an undisclosed amount. The deal includes a 145 MW facility in the Electric Reliability Council of Texas, or ERCOT, West region Sherbino Mesa 2, a 225 MW facility in Trinity Hills, and a 60 MW facility in the ERCOT North region Silver Star.


Dow Jones US Energy Fund (IYE) was down 4% and Energy Select Sector SPDR (XLE) was down 4.1%.

Minnesota Governor Mark Dayton's administration said Friday it appealed the Minnesota Public Utilities Commission's approval of Enbridge (ENB)'s plan to replace its Line 3 oil pipeline in Minnesota. In a statement, Dayton said that Enbridge "failed to provide a future demand forecast for its product, which is required by state law" and instead "presented its analysis of the future oil supply from Canadian tar sands extractions." Dayton added that Enbridge also failed to show that the state needs the pipeline to meet future oil demand, and then went on to say that most of the oil would actually flow through Minnesota to supply other states and countries. ENB shares fell more than 4%.


Crude was down 2.8%. United States Oil Fund (USO) was down 0.22%. Natural gas down 6.8% while United States Natural Gas Fund (UNG) was down 3.8%.

Gold was up 1.1%. SPDR Gold Trust (GLD) was up 1%. Silver was up 0.9%, while iShares Silver Trust (SLV) was up 1.0%.


Consumer Staples Select Sector SPDR (XLP) was down 2.8% and Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones U.S. Consumer Goods (IYK) were lower.

Consumer Discretionary Select Sector SPDR (XLY) was down 1.3% while retail funds SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) were weaker.

Tesla (TSLA) Chief Executive Elon Musk said the electric car company will reimburse customers who will miss out on significant tax credit due to delays on car deliveries, Reuters reported. The statement was made in relation to a tax overhaul passed by the US Congress late last year, where the first 200,000 buyers of electric vehicles sold by an automaker will get incentives in the way of tax credits that lower the cost of the units. The tax credit is then reduced by 50% every six months until it phases out. Earlier this year, Tesla said orders for cars placed by Oct.15 would be eligible for the full tax credit of $7,500 and that the cars will be delivered to their owners by the end of the year. From Jan. 1, 2019, the tax credit drops to $3,750. Reuters said some Tesla customers are reportedly still waiting for their vehicles despite only a few days of 2018 left, with some using social media to complain about the delays and claim a lack of communication by the company. TSLA fell more than 7%.

Health Care

Health Care SPDR (XLV) was down 2.3% while 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 up 0.7%.

Acorda Therapeutics (ACOR) shares rose more than 6% after the biotechnology company said the Food and Drug Administration approved its Inbrija drug for intermittent treatment of off episodes in people with Parkinson's disease treated with carbidopa/levodopa. Off episodes, also known as off periods, are defined as the return of Parkinson's symptoms that result from low levels of dopamine between doses of oral carbidopa/levodopa, the standard oral baseline Parkinson's treatment. The "approval of Inbrija marks a major milestone for both Acorda and the Parkinson's community...," Acorda CEO Ron Cohen said in a statement late Friday. FDA approval of Inbrija was based on a clinical program that included 900 people with Parkinson's on a carbidopa/levodopa regimen experiencing OFF periods. Inbrija is expected to be commercially available by prescription in the US in Q1.

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 All rights reserved. Unauthorized reproduction is strictly prohibited.

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

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