ETF Preview: Broad Market ETFs Decline in Line With Futures On Economic Growth Concerns

Pre-Market Movers

EWA -3%

DUST -2.4%

SCO -2%

EDC -2%

NUGT +3%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were all lower pre-market. Actively-traded PowerShares QQQ ( QQQ ) was down 0.3%.

U.S. stock futures are pointing to a lower open, in line with global markets, on renewed fears of a slowing economy.The Paris-based Organization for Economic Co-operation and Development cut its 2015 growth forecast to 2.9 percent in its bi-annual economic outlook from the 3.0 percent it forecast in September. However, it said the U.S. should go ahead and raise interest rates. Strong jobs data released Friday renewed expectations that the Federal Reserve hike rates for the first time since the financial crisis in December.

Power Play: Technology

Tech funds were inactive pre-bell after a higher close Friday. Technology Select Sector SPDR ETF ( XLK ), 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 flat Meanwhile, SPDR S&P International Technology Sector ETF (IPK) was also unchanged and bucked the trend to close lower.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were flat after a higher close.

UTStarcom Holdings (UTSI), a global telecom infrastructure provider, reported a Q3 non-GAAP basic net loss per share of $0.13, up from a loss of $0.20 for the same period last year, but missing the consensus analyst estimate by one penny.

The company reported Q3 non-GAAP revenues of $26.8 million, a decrease of 17% from the $32.3 million reported in Q3 of 2014, but beating analyst expectations of $23.2 million. Non-GAAP gross margin for the quarter was 22.8%, compared to 24% for the corresponding period of 2014, while Non-GAAP operating expenses were $6.7 million, a decrease of 24.1% from the same period in 2014.

Winners and Losers


Funds in the financial sector were mixed. Select Financial Sector SPDRs (XLF) was up 0.2%. Direxion Daily Financial Bull 3X shares (FAS) was down 0.8%; Direxion Daily Financial Bear 3X Shares (FAZ) was also leaning lower.

General Electric Company (GE), a diversified infrastructure and financial services company, said Monday that it has reached an agreement to sell its GE Capital's commercial lending and leasing portfolio in Australia and New Zealand to an affiliate of Bain Capital.

Terms of the transaction were not disclosed, but the company said the transaction includes about $1.7 billion in ending net investment.


Energy funds little changed. Dow Jones U.S. Energy Fund (IYE) was edging higher and Energy Select Sector SPDR (XLE) was flat.

Warren Resources (WRES) swung to a bigger-than-expected Q3 loss as revenue declined due to falling oil and gas prices, but said production remains strong.

The adjusted net loss was $18.3 million, or $0.23 a share, compared to adjusted net income of $3.0 million, or $0.04 a share in the third quarter of 2014 and wider than the $0.20 loss analysts had forecast, according to Capital IQ.

Revenue from oil and gas sales fell 50% to $19.6 million. Total revenue was $20.8 million down from $40.5 million, missing estimates for $23.9 million.


Crude was up 1.3%. United States Oil Fund (USO) was up 0.8%. Natural gas futures were down 1.7%. United States Natural Gas Fund (UNG) fell 0.4%. Gold was down 1.5% and SPDR Gold Trust (GLD) gained 0.2%.


Consumer staples funds were flat after closing in the red Friday. Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were in the red.

Consumer discretionary and retail funds were also unchanged pre-market. Consumer Discretionary Select Sector SPDR (XLY) was leaning lower, SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were flat after a mixed close.

Dean Foods Company (DF) shares were higher nearly 6% in recent pre-market trade after the company reported better than expected Q3 earnings and also guiding for higher Q4 and full-year earnings than the Street's views.

The food and beverage company said adjusted earnings rose to $0.30 per diluted share from a loss of $0.03 a year ago, beating the $0.24 average estimate from analysts polled by Capital IQ. Net sales fell to $2.03 billion from $2.37 billion and were just shy of the $2.04 billion consensus estimate.

Reported net income was meanwhile $20.2 million or $0.22 per diluted share compared to a loss of $16 million or $0.17 a year earlier.

Health Care

Health care funds had a weaker bias, in line with the broader market. Health Care SPDR (XLV) fell 0.3%, iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were flat. Meanwhile. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 0.07%.

Redhill Biopharma (RDHL) rose in Monday's pre-market session after the company reported a narrower-than-expected loss for Q3.

Shares are up 5.7% at $11.84, with a 52-week range of $6.89 - $22.22.

The biopharmaceutical company posted Q3 net loss of $3.3 million or $0.04 loss per share, compared with the prior-year period's $4.2 million or $0.06 loss per share. Analysts polled by Capital IQ were expecting a loss of $0.35 per share, if comparable.

Active broad-market exchange-traded funds in Friday's regular session:

SPDR S&P 500 (SPY): -0.6%

SPDR Select Sector Fund - Financial (XLF): +0.7%

iShares MSCI Emerging Index Fund (EEM): -2.1%

VIX Short-Term Futures ETN Ipath (VXX): +1.1%

Market Vectors Gold Miners ETF (GDX): -2.9%

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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