ETF Preview: Broad Market ETFs Lower Ahead of FOMC Statement; Oil Funds Decline on Crude Price Drop

Pre-Market Movers Wednesday

UCO -3.2%

USO -1.4%

XIV -1.2%

SCO +2.7%

TVIX +2.5%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were all weaker pre-market Wednesday. Meanwhile, actively traded PowerShares QQQ ( QQQ ) was down 0.4%.

U.S. stock futures were mixed ahead of a statement from the Federal Open Markets Committee, which is widely expected to point to a June interest rate increase. Policy makers are expected to remove the central bank's pledge to remain "patient" in its timing of rate rises. Oil prices continued to slide, falling 2.8% amid concern over oversupply. The weakness in oil prices pulled down oil-related funds pre-bell, with the Pro-shares Ultra UBS-DJS Crude Oil fund ( UCO ) down 3.2% and the United States Oil ( USO ) ETF down 1.4%.

Power Play: Commodities

Crude was down 2.8%; United States Oil Fund ( USO ) was down 1.5%. Natural gas fell 1.4% and United States Natural Gas Fund ( UNG ) fell 1.2%.

Gold was up 0.14%, and silver was down 0.5%. Among rare metal funds, SPDR Gold Trust ( GLD ) was edging higher and iShares Silver Trust (SLV) fell 0.5%.

Winners and Losers

Health Care

Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were inactive pre-bell and all closed lower Tuesday. Meanwhile, Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was edging down 0.09%.

Retrophin (RTRX) shares were up more than 25% pre-market after the Food and Drug Administration approved the company's Cholbam capsules to treat bile acid disorders. The stock recently traded at $18.48, in a 52-week spread of $7.85 to $24.25. The company said it now will exercise its right to purchase the worldwide rights, titles and ownership of the drug.


Select Financial Sector SPDRs (XLF) was tipping into the green. Direxion Daily Financial Bull 3X shares (FAS) and Direxion Daily Financial Bear 3X Shares (FAZ) were unchanged.

Goldman Sachs BDC, a lending unit of Goldman Sachs (GS) that invests primarily in middle-market companies in the U.S., announced in a filing Tuesday it priced an IPO of 6 million shares at $20 each, at the low end of the expected range of $20 to $21 per share.

Shares are expected to begin trading on the NYSE Wednesday under the ticker GSBD.


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) ended firmer, but are unchanged pre-market. SPDR S&P International Technology Sector ETF (IPK) was also flat.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1% and Semiconductor Sector Index Fund (SOXX) were down Tuesday, but inactive pre-bell.

Shares of Chinese online retailer Alibaba (BABA) were lower as a lockup of about 340 million shares was set to expire Wednesday. Investors holding some 340 million BABA shares will be free to sell as of Wednesday, when some lockup agreements put in place in the company's September initial public offering expire. The release will roughly double the amount of BABA shares potentially available on the open market.

A group of BABA employees, holding another 100 million shares, will be able to sell in May.


Dow Jones U.S. Energy Fund (IYE) was flat and Energy Select Sector SPDR (XLE) was down 0.5%.

Acorn Energy (ACFN) Wednesday reported it has stopped funding its majority-owned US Seismic Systems subsidiary, suspended operations and terminated substantially all employees. ACFN, primarily engaged in security services for power grids and for harbors and ocean-going ships, said it will take a $9.3 million in write downs on the USSI closure. AFCN said the subsidiary, which provided seismic information to oil drillers, was hit by the crude price slump.


Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were unchanged after a weaker close Tuesday.

Likewise, Consumer Discretionary Select Sector SPDR (XLY), SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) closed mixed Tuesday and were flat pre-market.

General Mills (GIS) shares edged up in Wednesday's pre-market session after the manufacturer and distributor of branded food products reported higher-than-expected fiscal Q3 adjusted earnings while revenue was in line with expectations. GIS was up 1.8% recently in the pre-market session at $53, within a 52-week range of $48.32 to $55.64.

For the quarter ended Feb. 22, 2015, General Mills reported net earnings attributable to the company fell to $343.2 million, or $0.56 per diluted share, from $410.6 million, or $0.64 per diluted share, in the quarter ended Feb. 23, 2014. On an adjusted basis, the earnings per share totaled $0.70 in the latest quarter, up from $0.62 in the same period a year earlier, and topping analysts' mean estimate of $0.67, according to Capital IQ.

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

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

iShares MSCI Emerging Markets Index (EEM): +0.4%

iPath S&P 500 VIX ST Futures ETN (VXX): +1.3%

Direxion Daily Gold Miners Index Bull 3X Shares (NUGT): -2.6%

Market Vectors Gold Miners ETF (GDX): -0.9%

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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