Broad Market Indicators
U.S. stock futures were pointing to a higher open on Wednesday with the oil and gas sector in focus following Shell (RDS-A)'s accord to buy smaller rival BG Group for about $70 billion. Among ETFs, however, China and emerging market funds were among the most active as markets reopened after a three-day holiday. The Direxion Daily China Bull Fund ( YINN ) gained more than 14% pre-bell, while the ProShares Ultra FTSE China 25 ( XPP ) was up 10%.
Power Play: Energy
Shell (RDS-A) Wednesday said it has agreed to buy its smaller British rival BG Group, which is expected to add some 25% to Shell's proved oil and gas reserves and 20% to production. The oil and gas giant also expects the combination to accelerate its growth strategy in global LNG and deep
As approved by the board of directors, BG shareholders will receive 383 pence (or approximately US$5.70) in cash and 0.4454 Shell B shares for each BG share held.
Furthermore, Shell expects to commence a share buyback program in 2017 of at least $25 billion for the period 2017 to 2020.
Winners and Losers
Consumer Staples Select Sector SPDR (XLP) was edging lower pre-market, while iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were inactive.
Consumer Discretionary Select Sector SPDR (XLY) was up 0.48%, SPDR S&P Retail (XRT) was heading lower. PowerShares Dynamic Retail (PMR) was flat and Market Vectors Retail ETF (RTH) jumped 1.7%.
Family Dollar Stores (FDO) on Wednesday reported fiscal Q2 adjusted earnings slightly above the Street view, but shares edged lower in the pre-market session as the discount-store operator's sales were merely in line with analysts' expectations.
For the quarter ended Feb. 28, 2015, net income fell to $76.7 million, or $0.67 per share, from $90.9 million, or $0.80 per share, for the quarter ended March 1, 2014. Adjusted to exclude fees related to its pending merger with Dollar Tree (DLTR), the company's earnings per share in the latest quarter were $0.74, above the $0.73 expected on average by analysts polled by Capital IQ.
Net sales rose to $2.80 billion from $2.72 billion a year earlier, matching the Street view.
Select Financial Sector SPDRs (XLF) and Direxion Daily Financial Bull 3X shares (FAS) were both higher, while Direxion Daily Financial Bear 3X Shares (FAZ) was also up 0.3%.
Blackstone (BX) was steady in pre-market trade Wednesday while Reuters reports the private-equity firm and Corsair Capital are in talks to acquire a major stake in First Eagle Investment Management, valuing the company at around $4 billion.
Shares of Blackstone were flat at $38.94, in a 52-week range of $26.56 - 39.62.
Technology Select Sector SPDR ETF (XLK), iShares Dow Jones US Technology ETF (IYW) were inactive, while iShares S&P North American Technology ETF (IGM) was higher. iShares S&P North American Technology-Software Index (IGV) were higher. SPDR S&P International Technology Sector ETF (IPK) were unchanged.
Semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were inactive after a mixed close Tuesday.
Qualys (QLYS), a provider of cloud security and compliance solutions, has been upgraded by analysts at Topeka Capital Markets to a buy rating from a hold. The firm also set its price target on the stock at $61 a share.
In Wednesday's pre-market session, shares of QLYS were unchanged from their Tuesday closing price of $49.08, and have a 52-week trading range of $18 - $50.
Crude was up 5.1%; United States Oil Fund (USO) fell 2.2%. Natural gas was down 1.9% and United States Natural Gas Fund (UNG) dropped 0.8%.
Gold was fell 0.22%, and silver was down 0.12%. Among rare metal funds, SPDR Gold Trust (GLD) dipped 0.3% and iShares Silver Trust (SLV) was also down 0.3%.
Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were mostly unchanged. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) fell 0.4%.
Merck (MRK) and Advaxis (ADXS) Wednesday reported they have started enrollment in a Phase 1/2 clinical trial to evaluate the combination of the investigational immunotherapy drug known as ADXS-PSA, and the drug pembrolizumab, a drug approved in the U.S. for patients with previously treated, metastatic castration-resistant prostate cancer.
Active broad-market exchange-traded funds in Tuesday's regular session:
VelocityShares 3X Long Crude ETN (UWTI): +8.2%
SPDR S&P 500 (SPY): +0.4%
United States Oil Fund (USO): +0.3%
iShares MSCI Emerging Index Fund (EEM): -0.1%
ProShares Ultra Bloomberg Crude Oil (UCO): +5.8%
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