ETF Preview: Broad Market ETFs Gain in Line With Futures After China Data Calms Fears

Pre-Market Movers Thursday:

EDC +4.2%

UCO +3.5%

BIB +2.6%

VIXY -3.4%

YANG -3.3%

Broad Market Indicators

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

U.S. stock futures are pointing to a higher open, in line with global markets, after Chinese manufacturing data came in better than expected.

Data in the U.S. on Thursday include initial jobless claims, that were higher than most estimates, with an additional 10,000 claims added in the week to 277,000, compared with estimates for 272,000.

Other data due, includes the September Institute for Supply Management ( ISM ) manufacturing number at 10 a.m. ET, which is expected to slip to 50.5 from 51.1 in August.

Power Play: Health Care

Health care funds were mixed pre-bell, with biotech higher in line with the broader market. Health Care SPDR ( XLV ) was edging lower, iShares Dow Jones US Healthcare ( IYH ) and Vanguard Health Care ETF ( VHT ) were inactive. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 0.4%.

Teva Pharmaceutical Industries (TEVA) was higher in pre-bell trade Thursday after the pharmaceutical company agreed to acquire Representaciones e Investigaciones Medicas, S.A. de C.V. (Rimsa), a pharmaceutical manufacturing and distribution company in Mexico, along with a portfolio of products and companies, intellectual property, assets and pharmaceutical patents in Latin America and Europe in a debt-free, cash free set of transactions, for an aggregate of $2.3 billion.

Winners and Losers


Funds in the financial sector had a weaker bias pre-bell sending bear bets higher. Select Financial Sector SPDRs (XLF) leaning lower. Direxion Daily Financial Bull 3X shares (FAS) was flat; Direxion Daily Financial Bear 3X Shares (FAZ) jumped 1.5%.

Park Sterling Corporation (PSTB), the holding company for Park Sterling Bank, agreed to buy First Capital Bancorp, Inc. (FCVA) for $82.5 million in cash and stock, based on Park Sterling's closing share price of $6.80 on September 30, 2015.

Under the terms of the merger agreement, First Capital common shareholders will have the right to receive either $5.54 in cash or 0.7748 Park Sterling shares for each First Capital share they hold, subject to a limitation that the merger consists of 30% cash and 70% stock.


Tech funds had a lower bias pre-bell, underperforming the broader market. Technology Select Sector SPDR ETF (XLK) was off 0.08%, iShares Dow Jones US Technology ETF (IYW) was flat, iShares S&P North American Technology ETF (IGM) was down 0.11% and iShares S&P North American Technology-Software Index (IGV) and SPDR S&P International Technology Sector ETF (IPK) were inactive.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was unchanged, while Semiconductor Sector Index Fund (SOXX) slipped 0.2%.

Google Inc. (GOOG, GOOGL) and Microsoft Corp. (MSFT) have agreed to end a five-year patent battle and drop approximately 20 lawsuits in the U.S. and Germany, Bloomberg reported late Wednesday.

The two companies have been in litigation since 2010 over royalties related to technology in Microsoft's Xbox video-game console. Microsoft also claimed Google's Android operating system was using some of its technology without providing royalties.


Energy funds were mixed to higher pre-bell. Dow Jones U.S. Energy Fund (IYE) was flat and Energy Select Sector SPDR (XLE) was up 0.6%.

Penn West Petroleum Ltd (PWE) Thursday reported the sale of its non-operated 9.5% working interest in the 2,500 bbl/d Weyburn Unit in Southeast Saskatchewan oilfield for $205 million cash, and said it plans to cut debt with proceeds. The deal is expected to close in Q4, but with an effective date of July 1.

Penn West, a Canadian conventional oil-and-gas producer, noted that it has raised $810 million YTD through its non-core asset disposition program.


Crude gained 2.3%; United States Oil Fund (USO) was up 1.6%. Natural gas fell 02% and United States Natural Gas Fund (UNG) was down 0.9%. Gold was down 1.1%, and SPDR Gold Trust (GLD) fell 0.09%.


Funds in the consumer sector were mixed pre-bell. Consumer Staples Select Sector SPDR (XLP) were edging higher, iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) fell 0.6%.

Consumer Discretionary Select Sector SPDR (XLY) was lightly lower, SPDR S&P Retail (XRT) fell 0.3%, PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were inactive.

Dave & Buster's Entertainment (PLAY), owner-operator of 77 dining and entertainment venues,Thursday reported it priced at $37 each 6.0 million shares to be sold by certain shareholders in a secondary offering planned to close Oct. 6.

The restaurant chain reported the shareholders have granted underwriters the option to purchase up to 900,000 additional shares of common stock at the offering price.

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

SPDR S&P 500 (SPY): +1%

VIX Short-Term Futures ETN Ipath (VXX): +2.7%

Direxion Daily Gold Miners Index Bull 3X Shares (NUGT): 1.9%

iShares MSCI Emerging Index Fund (EEM): +2.3%

iShares Russell 2000 ETF (IWM): +0.5%

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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