Mid-Day ETF Update: ETFs, Stock Higher as Worries Over Interest Rate Increase Fade

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

SPDR S&P 500 ( SPY ): +1.3%

iShares MSCI Emerging Index Fund ( EEM ): +1.8%

Market Vectors Gold Miners ETF ( GDX ): +3.8%

VIX Short-Term Futures ETN Ipath ( VXX ): -4.6%

iShares Russell 2000 ETF ( IWM ): +1.7%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively-traded PowerShares QQQ (QQQ) was up 1.1%.

U.S. stocks were also firmer at session's half, despite lackluster economic data. Investors have grown more optimistic as worries that the Federal Reserve will raise U.S. rates started to fade.

The Institute for Supply Management declined to a 56.9 reading this month from 59.0 in August, lagging market estimates looking for a 58.0 reading. The final September reading for the Purchasing Managers' services sector index came in at 55.1, down from 56.1 August reading and trailing the consensus view expecting a 55.8 score.

Also, the Labor Market Conditions Index dropped to a 0.0 reading this month from a downwardly revised 1.2 reading in August.

Power Play: Health Care

Health care funds were flat to lower, underperforming the broader market. Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were weaker. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 1.9%.

Spark Therapeutics (ONCE) rose 24% after the company said a Phase 3 trial of its SPK-RPE65 met its primary endpoint in the treatment of RPE65-mediated inherited retinal dystrophies. The company said results demonstrated improvement of functional vision in the intervention group compared to the control group, as measured by the change in bilateral mobility testing between baseline and one year. Subjects who received SPK-RPE65 also outperformed control subjects across the first two secondary endpoints: full-field light sensitivity threshold testing and the mobility test change score for the first injected eye. The third secondary endpoint, visual acuity, did not show statistically significant evidence of benefit, the company said. There were no serious adverse events related to SPK-RPE65 or deleterious immune responses observed in the trial.

Winners and Losers


Funds in the financial sector were higher, ahead of the broader market. Select Financial Sector SPDRs (XLF) was up 1.8%. Direxion Daily Financial Bull 3X shares (FAS) was up 5.1%; Direxion Daily Financial Bear 3X Shares (FAZ) was down 5%.

Intercontinental Exchange (ICE) was up 1.3% after reporting that September futures and options average daily volume fell 6% from a year ago while New York Stock Exchange US cash equities average daily volume rose 27%. Commodity average daily volume increased 3% led by Brent, gasoil, other oil and sugar while financials average daily volume fell 16% amid low European short-term interest rates. NYSE's US equity options average daily volumes fell 16% and the exchange's cash equities market share was 25.3%.


Tech funds were higher, in line with 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 in positive territory. SPDR S&P International Technology Sector ETF (IPK) was flat.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 2%, while Semiconductor Sector Index Fund (SOXX) was up 2.1%.

Wave Systems (WAVX) rose 11.8% after the developer of hardware-based computer security systems said it has signed a three-year software license and distribution agreement with Silicon Application Corp. Group for the management and maintenance of the Trusted Platform Module (TPM) software. The agreement grants to Silicon Application a royalty-bearing limited license to use, reproduce, distribute and import Wave's TPM management software client for packaging and sales distribution with the TPM 2.0 microchip.


Energy funds were higher, outperforming the broader market. Dow Jones U.S. Energy Fund (IYE) was up 2.8% and Energy Select Sector SPDR (XLE) was up 2.9%.

NV5 Holdings (NVEE) was up 2.4% after saying it has won a contract worth $1.5 million in estimated revenues in 2015 to support the U.S. Department of Energy's nuclear cleanup effort at the Hanford Reservation located near Richland, Washington. NV5 Holdings was awarded full contractual responsibility for the quality control services subcontracted by Bechtel National. The Waste Treatment Plant is being designed and constructed in compliance with ASME Nuclear Quality Assurance (NQA-1). In accordance with NQA-1 criteria, NV5 will be performing quality control field and laboratory testing and construction materials inspection services at the highly secured nuclear facility.


Crude was up 2.3%; United States Oil Fund (USO) was up 2.1%. Natural gas was up 0.3% and United States Natural Gas Fund (UNG) was up 0.5%. Gold was down 0.1%, and SPDR Gold Trust (GLD) was down 0.2%.


Funds in the consumer sector were firmer, in line with the broader market. Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were in the greed.

Consumer Discretionary Select Sector SPDR (XLY), SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were also higher.

Tata Motors Ltd (TTM) was up 5.5% after commenting on an Economic Times story that it was in talks with Peugeot Citroen to form a partnership for the Indian market. Tata said in a Securities and Exchange Commission filing that while it may be pursuing several initiatives at a given point of time, there are no specific events that require a disclosure. The Economic Times reported the partnership could result in Tata making and distributing Peugeot Citroen's cars for India.

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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