ETF Preview: ETFs, Futures Higher on ECB Interest Rate Cuts, Rise in Weekly Jobless Claims

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Active broad-market exchange-traded funds at the close of Wednesday's regular session:

SPDR S&P 500 ( SPY ): +0.20%

iShares S&P 500 ( IVV ): +0.18%

PowerShares QQQ ( QQQ ): +0.37%

iShares Russell 2000 ( IWM ): +0.39%

iShares Russell 1000 Growth ( IWF ): +0.28%

iShares MSCI Emerging Markets Index (EEM): -0.56%

United States Oil Fund (USO): -0.35%

SPDR Gold Shares (GLD): -0.21%

Select Financial Sector SPDRS (XLF): +0.27%

Pre-Market Movers

SPY, +0.07%

IWM, +0.26%

EEM, +0.54%

EWJ, -0.34%

QQQ, +0.07%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were firmer pre-market Thursday. Actively traded PowerShares QQQ ( QQQ ) was up 0.07%, after hitting a 13-year high in the previous session.

U.S. stock futures were higher following the European Central Bank's announcement that it will reduce interest rates and install a negative rate on bank deposits - a first in its history. The move is aimed at preventing low inflation from gaining momentum, which would jeopardize the euro zone's recovery. The ECB also dropped the rate on bank deposits held overnight with the central bank to minus 0.1%.

Back home, U.S. jobless claims rose 8,000 to 312,000 - a higher gain than economists had expected. Despite the increase, initial claims were still near a post-recession low, which could indicate a low number of layoffs. The average of new claims over the past month fell to 310,250 - the lowest level since June 2007.

Power Play: Consumer

Consumer funds are expected to see active trade as several major retailers and consumer goods companies report comparable store sales figures and/or earnings results. Retail ETFs SPDR S&P Retail (XRT), Market Vectors Retail ETF (RTH), and PowerShares Dynamic Retail (PMR) were quiet in the pre-market session.

Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were also flat.

Among stocks, Vera Bradley, Inc. (VRA) crumbled nearly 19% as shares came off a pre-market trading halt after the company reported Q1 net income of $6.6 million, or $0.16 per share, down from $9.2 million, or $0.23 per share, a year earlier. Excluding discontinued operations, it earned $0.17 per share in the latest period. Analysts polled by Capital IQ were expecting earnings from continuing operations of $0.13 per share. Net revenue slipped 7.8% to $113.5 million, missing analysts' mean estimate of $118 million. The company's guidance had been for $116 million to $120 million.

For fiscal Q2, it sees net revenue of $113 million to $120 million, down from $125.4 million a year ago and below analysts' mean estimate of $127 million. It expects EPS of $0.18 to $0.20, down from $0.37 a year ago and below analysts' consensus of $0.30.

Winners and Losers


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 inactive. SPDR S&P International Technology Sector ETF (IPK) was unchanged and reached a record high in the previous session.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were unchanged.

In corporate news, Ciena (CIEN) was up some 13% after it reported a Q2 net loss of $10.2 million, or $0.10 per share, compared with a prior-year net loss of $27.1 million, or $0.27 per share. Excluding one-time items, the company earned $0.17 per share in the latest period, up from $0.02 per share a year earlier and above the $0.13 per share expected by analysts polled by Capital IQ. Total revenue climbed 10% to $560.1 million, topping analysts' mean estimate of $559 million. For fiscal Q3, the company forecast revenue of $585 million to $615 million; analysts' mean estimate was $585 million.


Select Financial Sector SPDRs (XLF) was flat. Direxion Daily Financial Bull 3X shares (FAS) was up 0.27%. Its bearish counterpart, FAZ, was down 0.27%.

Among sector news, ING Group, N.V (ING) was up 0.77% after it said it is proceeding with the Initial Public Offering (IPO) and listing on Euronext Amsterdam of NN Group N.V., its international insurance and investment management company. NN Gorup offers retirement, life insurance, non-life insurance, investment management and banking (in the Netherlands) to its customers across Europe and Japan. The IPO will comprise existing ordinary shares in NN Group, currently wholly owned by ING.


Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were weaker, but closed the previous session near their record highs.

Among stocks, Rose Rock Midstream (RRMS) has executed a definitive agreement to acquire crude oil trucking assets from a subsidiary of Chesapeake Energy Corporation (CHK). The deal, expected to close in Q2, includes 124 trucks, 122 trailers and miscellaneous equipment operating in Texas, Oklahoma and Ohio,as well as approximately 200 employees and transportation agreements at market rates with Chesapeake Energy Marketing. Following the close of the acquisition, Rose Rock will operate a fleet of more than 250 trucks with approximately 350 employees, servicing the Bakken, DJ / Niobrara, Eagle Ford, Granite Wash, Mississippi Lime, Permian, San Juan and Utica plays. RRMS shares were flat pre-market while CHK shares were up 0.10%.


Vanguard Industrials (VIS), iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), and Select Sector SPDR-Industrial (XLI) closed the previous session in positive territory.

In corporate news, Navistar International (NAV) reported a Q2 loss of $3.65 per diluted share, narrower than the loss of $4.65 per diluted share reported in Q2 2013 but wider than the loss of $1.27 per share predicted by analysts. Revenues in the quarter were $2.74 billion, up from $2.52 billion in Q2 2013 and beating analyst projections of $2.66 billion. Results include $151 million in intangible asset impairment charges and a $29 million tax valuation allowance, both primarily related to declines in actual and forecasted results for the company's operations in Brazil.

The company has raised its Class 8 truck industry forecast for FY2014 in the U.S. and Canada to 225,000-235,000 and has increased its structural cost savings goal to $250 million, versus its previous goal of $175 million. The company projects Q3 EBITDA between $75 million - $125 million, excluding pre-existing warranty and one-time items, and projects between $950 million and $1.05 billion in manufacturing cash, cash equivalents and marketable securities at the end of Q3.


Crude was down 0.41%; natural gas was up 0.58%. United States Oil Fund (USO) and United States Natural Gas Fund (UNG) were both flat.

Gold was leaning higher, up 0.03%, and silver was down 0.01%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.12% and iShares Silver Trust (SLV) was down 0.06%.

Health Care

Health Care SPDR (XLV) iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) are unchanged and all closed higher on Wednesday. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 0.22% in pre-market.

In corporate news, Curis (CRIS) was up nearly 6% after announcing it has re-initiated dosing in the single-agent clinical trial of CUDC-427 in patients with advanced and/or refractory solid tumors or lymphomas. CUDC-427 is a novel, oral small molecule that is designed to promote cancer cell death by antagonizing inhibitor of apoptosis proteins that support survival of cancer cells. The primary objective of the monotherapy study under the amended protocol is to determine the safety and recommended Phase 2 dose for CUDC-427 when administered orally once daily for two weeks, followed by a one week rest period in 21-day cycles until disease progression or study discontinuation.

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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