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ETF Preview: ETFs, Futures Higher as Upbeat Earnings from General Electric Brightens Market Sentiment

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

SPDR S&P 500 ( SPY ): +0.2%

iShares MSCI Emerging Index Fund ( EEM ): +0.6%

SPDR Select Sector Fund - Financial ( XLF ): +0.4%

VanEck Vectors Gold Miners ETF ( GDX ): +1.8%

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): +0.6%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.1%.

US stock futures were higher as investors' appetite for risk were fueled by earnings-related gains in General Electric (GE), Comcast (CMCSA) and General Dynamics (GD).

Shares of Dow component GE -- the most active stock in pre-market trading -- are indicated to trade higher for a second day as better-than-expected oil and gas revenue offset a miss on Q4 profit and sales.

In economic data, the Federal Housing Finance Agency's house price index rose 0.4% in November, just missing consensus estimates. The Purchasing Managers' index is set for release at 9:45 am and then existing home sales at 10 am.

Power Play: Industrial

Select Sector SPDR-Industrial (XLI) rose 0.3% while other industrial funds Vanguard Industrials (VIS), iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ) were inactive.

General Electric Company (GE) fell 0.6% after itreported Q4 adjusted net loss of $1.23 per share, compared to adjusted net profit of $0.46 per share in the prior year period. Excluding certain charges that were not included in guidance provided in November, GE said non-GAAP EPS was $0.27. Capital IQ provided a Street estimate of $0.28 earnings per share. On a reported basis, the net loss from continuing operations was $1.15 compared to a profit of $0.39 a year ago. Analysts had expected a GAAP profit of $0.25 per share. Consolidated revenue was $31.4 billion, down from $33.09 billion reported for the same period last year. The Street estimate was for $33.93 billion.

Winners and Losers

Financial

The Select Financial Sector SPDRs ( XLF ) was up 0.4%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.4% and its bearish counterpart FAZ was down 0.1%.

Northern Trust (NTRS) rose more than 1% after it reported Q4 net income per diluted common share of $1.51, up from $1.11 a year ago. Analysts polled Capital IQ expected GAAP EPS of $1.37. Revenue for the quarter was $1.43 billion, up from $1.35 billion in the year-ago period, and ahead of the consensus analyst forecast of $1.41 billion. The company ended 2017 with $1.16 trillion of assets under management, which was up 23% from the previous year.

Technology

Technology Select Sector SPDR ETF (XLK) and other tech funds 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.

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

StarTek (SRT) shares jumped 36% after the provider of contact center and customer engagement solutions said in a regulatory filing it is issuing a warrant to Amazon.com under which it may buy up to 4 million of the company's shares. StarTek said the agreement was reached in connection with existing commercial arrangements with Amazon under which it provides and will continue to provide commercial services to the e-commerce giant.The warrant shares will vest based on Amazon's payment of up to $600 million to the company in connection with Amazon's receipt of commercial services from the company. The exercise price of the shares are $9.96 each and they are exercisable through Jan. 23, 2026. The warrant may be exercised with respect to shares representing 19.9% of StarTek's shares, or 3,222,681 shares without the approval of the company's stockholders. The exercise of the remaining 777,319 warrant shares is subject to the prior approval of the stockholders. AMZN shares rose more than 1%.

Energy

Dow Jones US Energy Fund (IYE) was up 0.02% and Energy Select Sector SPDR (XLE) was up 0.1%.

Commodities

Crude was up 0.3%. United States Oil Fund (USO) was down 0.2%. Natural gas was up 2.7% while United States Natural Gas Fund (UNG) was up 6.2%.

Gold was up 1.6%. SPDR Gold Trust (GLD) was up 0.8%. Silver was up 2.4%, while iShares Silver Trust (SLV) was up 1.6%.

Consumer

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

Consumer Discretionary Select Sector SPDR (XLY) and retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were quiet in pre-market trade.

Comcast (CMCSA) fell marginally after the company reported Q4 adjusted earnings of $0.49 per share, excluding one-time items and the impact of the new US tax legislation, compared with the prior-year period's $0.45 per share. Analysts polled by Capital IQ were expecting EPS of $0.47. Revenue was $21.92 billion, up 4.2% from $21.03 billion in the same quarter last year. The Street view was for revenue of $21.83 billion. The company said that it has increased its dividend by 21% to $0.76 per share on an annualized basis for 2018. In accordance with the increase, the board of directors declared a quarterly cash dividend of $0.19 a share on the company's stock, payable on April 25 to shareholders of record as of the close of business on April 4. Comcast also said it expects to repurchase at least $5.0 billion of its common stock during 2018, subject to market conditions. As of Dec. 31, 2017, the company had $7.0 billion available under its share repurchase authorization.

Health Care

Health Care SPDR (XLV) and other health care funds Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were quiet. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.1%.

Synlogic (SYBX) shares tumbled 11% after the clinical-stage company priced its underwritten public offering of over 5.1 million shares at $9.75 a share, 9% lower than the share closing price on Tuesday. The gross proceeds to Synlogic from the offering, before deductions, are expected to be $50 million. Synlogic said it has also granted to the underwriters a 30-day option to buy up to 0.8 million additional shares at the public offering price, less underwriting discounts and commissions. The offering is expected to close on or about Jan. 26.

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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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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