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ETF Preview: ETFs, Futures Lower Ahead of Fed Policy Meeting; Street Continues to Digest Earnings

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

SPDR S&P 500 ( SPY ): -0.1%

iShares MSCI Emerging Index Fund ( EEM ): -0.5%

VelocityShares Daily 2x VIX Short Term ETN ( TVIX ): +0.4%

VanEck Vectors Gold Miners ETF ( GDX ): -0.8%

SPDR Select Sector Fund - Financial ( XLF ): +0.6%

PowerShares QQQ Trust, Series 1 (QQQ):-0.1%

Broad Market Indicators

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

US futures were pointing to a negative open as earnings reports continued to stream in, with Merck (MRK), Pfizer (PFE) and Aetna (AET) slipping lower following mixed results and guidance. Meanwhile, BP (BP) and L3 Technologie (LLL) were both modestly higher after better-than-expected profit and Q1 results above Street expectations, respectively.

Investors are also keeping an eye on the Federal Reserve as its starts its two-day policy meeting later this afternoon.

In economic data news, the PMI manufacturing index is due for release at 9:45 am ET, and the ISM manufacturing index and construction spending at 10 am ET.

Apple (AAPL), Gilead (GILD), Mondelez International (MDLZ), Yum China (YUM) and Snap (SNAP) will be releasing their financial results after the close.

Power Play: 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 quiet.

Seagate Technology (STX) slumped nearly 5% after the provider of data storage solutions reported fiscal Q3 results that beat Wall Street expectations. Adjusted earings totalled $1.46 per diluted share for the three months ended March 30, beating the $1.33 average estimate of analysts surveyed by Capital IQ. Fiscal Q3 revenue rose to $2.80 billion, from $2.67 billion, topping the analyst consensus of $2.75 billion.

Winners and Losers

Financial

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

The Carlyle Group L.P (CG) reported Q1 economic net income per adjusted unit of $0.47, versus $1.09 last year. This beat the $0.37 Street view.Revenue for the quarter was $702.8 million, down from $1.12 billion last year but ahead of the $563.6 million analyst consensus. The company's board approved a quarterly distribution of $0.27 per common unit to holders of record at the close of business on May 11, payable on May 17. The company's prior quarterly dividend was $0.33 per share.

Industrial

Select Sector SPDR-Industrial (XLI) and other industrial funds Vanguard Industrials (VIS) and iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), were flat.

L3 Technologies (LLL) marginally after it reported Q1 EPS of $2.34, up from $1.93 per share a year earlier, which beat the $2.01 per share consensus of analysts polled by Capital IQ. Revenue rose 2% year-over-year to $2.37 billion, also topping the $2.32 billion mean estimate. Looking ahead, the company now expects EPS of $9.40 to $9.60, up from a prior view of $9.30 to $9.50 per share, and straddling the $9.54 per share consensus. It continues to expect sales of $9.85 billion to $10.05 billion, also straddling the $9.99 billion mean estimate. Separately, the company said it sealed a definite deal to sell its Vertex Aerospace business to American Industrial Partners for $540 million in cash. The deal, which is slated to close in the summer, also includes L3 Technologies' Crestview Aerospace and TCS business units.

Energy

Dow Jones US Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were both inactive in the pre-market session.

BP (BP) rose nearly 1% after it reported Q1 earnings per ADS of $0.78, up from last year's $0.46, and exceeding the Street view of $0.66. Sales grew year-over-year to $68.17 billion from $55.86 billion, but fell short of a single forecast for $69.40 billion. For Q2, the company expects production to be lower than Q1, reflecting the expiration of the Abu Dhabi offshore concession and seasonal turnaround and maintenance activities. The company will be paying an unchanged quarterly cash dividend of $0.10 per share or $0.60 per ADS on June 22 to shareholders and ADS holders on the register on May 11.

Commodities

Crude was down 1%. United States Oil Fund (USO) was down 0.7%. Natural gas was up 0.9% while United States Natural Gas Fund (UNG) was up 0.81%.

Gold was down 0.7%. SPDR Gold Trust (GLD) was down 0.4%. Silver was down 0.3%, while iShares Silver Trust (SLV) was flat.

Health Care

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

Merck & Company (MRK) fell marginally after it reported non-GAAP Q1 EPS of $1.05, versus $0.88 last year. This beat the $1.00 analyst consensus. Revenue for the quarter was $10.04 billion, versus $9.43 billion last year, and just shy of the $10.09 billion Street view. The company narrowed and raised its 2018 full-year non-GAAP EPS range to between $4.16 and $4.28, versus prior guidance of $4.08 to $4.23. The Street is at $4.19. The company also narrowed and raised its 2018 full-year revenue range to between $41.8 billion and $43.0 billion, versus prior guidance of $41.2 billion to $42.7 billion. The Street is at $41.86 billion.

Consumer

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

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 the pre-market session.

Rent-A-Center (RCII) was down more than 1% after it said Q1 sales slipped 5.9% to $698.0 million from the year-ago period and missed the CapIQ mean for $701.3 million. Net loss per share widened to $0.37 from a loss of $0.13 and missesd forecasts for a $0.13 gain. Less items, EPS were a loss of $0.08, down from a profit of $0.04 last year and below the Street's estimate for a $0.13 normalized profit.

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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