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Mid-Day ETF Update: ETFs Firmer, Stocks Climb to Record Highs on M&A Activity, Bullish Forecasts for Economic Data

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

SPDR S&P 500 ( SPY ): +0.79%

iShares Russell 2000 Index ( IWM ): +2.07%

PowerShares QQQ Trust, Series 1 ( QQQ ): +1.35%

Direxion Daily Small Cap Bear 3X Shares ( TZA ): -6.22%

iShares MSCI Emerging Markets Index ( EEM ): +1.24%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ ( QQQ ) was up 1.35%.

U.S. stocks were in positive territory as well, reaching record highs Monday as investors respond favorably to recent M&A activity, such as Hillshire Brands' (HSH) acquisition of Pinnacle Foods (PF). Forecasts for economic data this week were bullish, also helping to lift market sentiment. Economic data on tap include April retail sales data on Tuesday, PPI data for April on Wednesday and the U.S. The Empire and Philadelphia Manufacturing surveys for May along with April CPI/IP out Thursday. In earnings news, Rackspace (RAX) and Elizabeth Arden (RDEN) will be reporting their financial results in the after hours session.

Power Play: Technology

Tech funds are ahead of the broader market. 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 firmer. SPDR S&P International Technology Sector ETF (IPK) was up 1.16%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 2.33% and Semiconductor Sector Index Fund (SOXX) was up 1.77%.

In corporate news, Gogo Inc. (GOGO) was up nearly 9% after it reported a Q1 loss per share of $0.20, narrower than the loss of $4.77 per share in Q1 2013 and the $0.25 per share predicted by analysts for Q1 2014. Total revenue of $95.7 million was up from $70.8 million in Q1 2013 and beat analyst estimates of $94.03 million. The company has reaffirmed full-year guidance of total revenue of $400 million to $422 million. The Street is at $413 million.

Winners and Losers

Financial

Select Financial Sector SPDRs (XLF) was down 0.30%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.04%. Its bearish counterpart, FAZ, was up 0.90%.

Among sector news, Solera Holdings (SLH) was up 2% after it said it agreed to acquire claims-related products and related intellectual property from the Sherwood group of companies. The business to be acquired is a provider of innovative exchanges, settlement platforms, and data analytics focused on the insurance industry in the U.K., including car rental billing services and pet insurance claims. The acquisition, which will be done through a series of transactions, is expected to close in Q4 of SLH's fiscal year ending June 30, 2014. Financial terms were not disclosed.

Energy

Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were in positive territory.

Among stocks, SunCoke Energy (SXC) was up 2% after it confirmed its FY14 consolidated adjusted EBITDA outlook but cut the guidance range for earnings per share in connection with reducing debt. The coke producer said it now expects EPS attributable to SXC to be between $0.02 and $0.24 per share compared to the previous range given in April between $0.08 and $0.33 per diluted share. Consolidated adjusted EBITDA is still expected to be between $220 million and $240 million.

Commodities

Crude was up 0.54%; United States Oil Fund (USO) was up 0.44%. Natural gas was down 1.81% and United States Natural Gas Fund (UNG) was down 1.95%.

Gold was up 0.84% and silver was up 2.64%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.74% and iShares Silver Trust (SLV) was up 2.28%.

Consumer

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

Among stocks, Kandi Technologies Group (KNDI) climbed more than 17% after it reported Q1 revenues grew 174.0% to $40.2 million from $14.7 million in Q1 2013. Non-GAAP net income, excluding the effects of a stock award expense and the change of the fair value of financial derivatives, was $1.6 million, an increase of 30.4% compared with $1.3 million in Q1 2013. The GAAP net loss for Q1 was $14.1 million compared to a net income of $2.2 million in the same period last year.

Health Care

Health Care SPDR (XLV) iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were in firmer. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 1.83%.

In corporate news, TESARO (TSRO) was up more than 18% after reporting positive top-line results from the third and final Phase 3 trial of rolapitant, an investigational neurokinin-1 (NK-1) receptor antagonist in development for the prevention of chemotherapy-induced nausea and vomiting (CINV). The rolapitant arm in this trial, which enrolled patients receiving cisplatin-based, highly emetogenic chemotherapy (HEC), successfully achieved statistical significance over the standard therapy arm for the primary and all secondary endpoints. The adverse event profile for rolapitant remains consistent with that seen in previous clinical studies.

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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