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ETF Preview: ETFs, Futures Slip Lower Ahead of June Pending Home Sales Data

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

SPDR S&P 500 ( SPY ): -0.46%

iShares S&P 500 ( IVV ): -0.44%

PowerShares QQQ ( QQQ ): -0.39%

iShares Russell 2000 ( IWM ): -0.91%

iShares Russell 1000 Growth ( IWF ): -0.50%

iShares MSCI Emerging Markets Index (EEM): -0.40%

United States Oil Fund (USO): -0.13%

SPDR Gold Shares (GLD): +1.16%

Select Financial Sector SPDRS (XLF): -0.56%

Monday's Pre-Market Movers

SPY, -0.15%

IWM, -0.01%

GDX, -0.15%

XLF, flat

EEM, +0.16%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV, were edging lower in Monday's pre-market trading . Actively traded PowerShares QQQ ( QQQ ) was down 0.14%.

U.S. stock futures were also slipping lower ahead of the pending home sales for June, which will be reported 10 am ET. Economic data for the rest of the week include Q2 gross domestic product, July payrolls and a Federal Open Market Committee decision.

M&A activity is in the spotlight as shares of Dollar Tree (DLTR) and Family Dollar (FDO) gained in pre-market after announcing DLTR will acquire FDO.

Power Play: Consumer

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

Dollar Tree (DLTR) rose 10.96% after it entered into a definitive merger agreement to acquire Family Dollar (FDO) in a cash- and-stock transaction. FDO shares were up nearly 25%.

The value of the deal is $74.50 per share, a 22.8% premium over Family Dollar's closing price as of July 25. Family Dollar shareholders will receive $59.60 in cash and $14.90 equivalent in Dollar Tree shares. The stock portion will be subject to a collar such that Family Dollar shareholders will receive 0.2484 Dollar Tree shares if the average Dollar Tree trading price during a specified period preceding closing is equal to or greater than $59.98 and 0.3036 Dollar Tree shares if this average trading price is less than or equal to $49.08. If the average trading price of Dollar Tree stock during this period is between $49.08 and $59.98, Family Dollar shareholders will receive a number of shares between 0.2484 and 0.3036 equal to $14.90 in value. The transaction values Family Dollar at an enterprise value of approximately $9.2 billion, and it represents an enterprise value to last twelve months May 31, 2014 EBITDA multiple of 11.3x.

The combined company will continue to operate and grow both the Dollar Tree and Family Dollar brands, offering fixed- and multi-price point formats. The deal is expected to achieve an estimated $300 million in annual run rate synergies by the end of the third year post-closing and is predicted to be accretive to cash EPS within the first year post-closing.

Winners and Losers

Financial

Select Financial Sector SPDRs (XLF) was flat; Direxion Daily Financial Bull 3X shares (FAS) and Direxion Daily Financial Bear 3X shares (FAZ) were inactive as well.

J.P. Morgan Chase & Co (JPM) said it has agreed to sell a portfolio of loans and securities to Sankaty Advisors, an independently managed credit affiliate of Bain Capital. The portfolio, belonging to the bank's Global Special Opportunities Group, contains mezzanine loans in North America and Europe, as well as loans and related special situations investments in Australia and across Asia, with an aggregate value of approximately $1.3 billion. This acquisition follows Sankaty Advisors' other recent purchases of loan portfolios from Irish Bank Resolution Capital, Lloyds Banking Group and CapitalSource.

Technology

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 also flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were unchanged after seeing losses in the previous session.

XG Technology (XGTI) surged in 17% in pre-market trade after the company announced it has won a contract from CACI International (CACI) to provide communications and networking services to the U.S. Army. CACI's prime contract is worth up to $497 million and is a five year - three base plus two option years multiple-award indefinite delivery/indefinite quantity. CACI shares were flat.

Energy

Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were both inactive.

Alliance Holdings GP (AHGP) reported that financial results for Q2 ended June 30, 2014 topped analysts' expectations. The company posted Q2 net income of $77.3 million, or earnings per limited partner interest of $1.29 per unit, compared with the prior-year period's $60.98 million or $1.02 per unit. Revenue was $598.46 million, up from $553.48 million in the same quarter last year. Analysts polled by Capital IQ were expecting earnings of $1.05 per unit on revenues of $573.88 million.

The board of directors of AHGP's general partner increased the cash distribution to unitholders for the 2014 quarter to $0.87 per unit, or an annualized rate of $3.48 per unit, payable on Aug. 19, 2014 to AHGP's unitholders of record as of the close of trading on Aug. 12, 2014.

Commodities

Crude was down 0.35%; natural gas was down 0.11%. United States Oil Fund (USO) and United States Natural Gas Fund (UNG) were flat..

Gold was up 0.20%, and silver was up 0.41%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.23% and iShares Silver Trust (SLV) was down 0.35%.

Health Care

Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were unchanged. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was flat.

AcelRx Pharmaceuticals (ACRX) said the FDA issued a Complete Response Letter (CRL) for the company's new drug application (NDA) for Zalviso (sufentanil sublingual tablet system). The company is currently reviewing the FDA's comments and requests contained in the CRL and plans to discuss these requests with the FDA. The CRL contains requests for additional information on the Zalviso System to ensure proper use of the device. The requests include provision of bench data demonstrating a reduction in the incidence of optical system errors which require premature drug cartridge change, changes to the Instructions for Use for the device, and additional data to support the shelf life of the product. ACRX shares plunged 29.27% following a trading halt in the pre-market session.

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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