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Mid-Day ETF Update: ETFs, Stocks Cautiously Higher as Consumer Spending Rises; Gains Offset by Slump in Crude

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

iShares MSCI Emerging Index Fund ( EEM ): +0.7%

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

SPDR Select Sector Fund - Financial ( XLF ): +0.3%

United States Oil Fund ( USO ): -3.2%

VanEck Vectors Gold Miners ETF ( GDX ): +1.9%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.2%.

U.S. stocks were higher after consumer spending rose 0.3% in September, just above forecasts for a 0.4% increase.

Gains, however, were kept in check by continuing declines in crude oil prices as doubts over a possible agreement on production cuts by major oil producing nations persisted.

In other economic data news, the Dallas Fed's manufacturing index rose 1.2 points to -1.5 in October, missing forecasts.

Meanwhile, the Chicago Institute for Supply Management Purchasing Managers' Index (PMI) dropped 3.6 points to 50.6 in October versus an expected increase to 54.3

Power Play: Health Care

Health care funds were lower, behind the broader market. Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were firmer. Meanwhile, biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was down 0.9%

TeamHealth Holdings (TMH) rose 16.1% after The Blackstone Group (BX) said it will purchase the physician services organization in a transaction worth about $6.1 billion. Blackstone and its co-investors will pay $43.50 a share in cash to TeamHealth shareholders, a 33% premium over the company's closing price on Oct. 3. TeamHealth's board has approved the deal, and JANA Partners, which owns about 8% of the company, will vote in favor of the transaction. If approved by shareholders, the deal is expected to close in Q117 when TeamHealth will become a private company wholly owned by funds affiliated with Blackstone.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.3%. Direxion Daily Financial Bull 3X shares (FAS) was up 1.4% while its bearish counterpart, FAZ, was down 1.4%.

Mercury General (MCY) rose 8.8% to its highest since June 2015 after the company reported a Q3 adjusted operating earning of $0.67 per share compared with income of $0.59 per share a year ago, beating the $0.54 average EPS estimate from analysts polled by Capital IQ. Sales over the three months that ended Sept. 30 fell to $808.2 million from $752.4 million a year ago, below the $826.5-million consensus. In a statement released early Monday, the company said its board declared a quarterly dividend of $0.6225 per share, up from $0.62/share. The dividend will be paid on Dec. 29 to shareholders of record on Dec. 15.

Technology

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

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.3% and Semiconductor Sector Index Fund (SOXX) was up 0.9%.

Broadsoft Inc. (BSFT) was down 8.1% after the company reported Q3 adjusted EPS was $0.52 per share, up from $0.37 per share in the year-ago quarter and higher than the $0.37 per share consensus provided by Capital IQ. Revenues rose 22% year-over-year to $84.1 million and were above the $81.3 million mean estimate. For Q4, Broadsoft expects adjusted EPS of $0.65 to $0.83 per share on revenues of $94 million to $102 million, straddling the consensus for $0.82 on EPS and $101.1 million on revenues. FY16 adjusted EPS is forecast at $2.04 to $2.22 per share, in line to above the $2.06 per share consensus on revenues of $333 million to $341 million, which straddles the $337.2 million consensus.

Earlier on Monday, BroadSoft said it acquired VoIP Logic, a wholesale provider of BroadWorks-based cloud communications services, and expects the deal to be $0.01 diluted to its adjusted EPS and contribute about $800,000 in revenue for 2016.

Energy

Dow Jones U.S. Energy Fund (IYE) was down 0.9% while Energy Select Sector SPDR (XLE) was down 0.8%

Midcoast Energy Partners (MEP) was down 8.5% after the company reported an adjusted loss for Q3 that widened year-over-year on lower revenues that missed analysts' views compiled by Capital IQ. Q3 adjusted loss was $0.25 per share, widening from a loss of $0.02 per share last year and missing the consensus for a loss of $0.16 a share. The operator of natural gas transportation assets said revenues fell to $486 million from $661 million and missed expectations for $618.3 million. Looking ahead, the company raised its FY16 guidance on adjusted EBITDA to between $75 million and $85 million from a prior view for $55 million to $75 million. Distributable cash flow guidance was also raised to between $48 million and $55 million from a prior outlook for $25 million to $40 million.

Commodities

Crude was down 3.1%. United States Oil Fund ( USO ) was down 3.2%. Natural gas was down 0.8% and United States Natural Gas Fund (UNG) was down 0.8%.

Gold was down 0.2%. SPDR Gold Trust (GLD) was down 0.1%. Silver was up 0.1% while iShares Silver Trust (SLV) was down 0.3%.

Consumer

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

Consumer Discretionary Select Sector SPDR (XLY) was in the green while retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were mixed.

Lumber Liquidators Holdings, Inc (LL) was down 14.1% after the company reported Q3 net loss of $0.68 per share, compared to $0.31 loss per share in the prior year period. Capital IQ provided a Street estimate of $0.21 loss per share. Net sales were $244.1 million, up from $236.1 million reported for the same period last year and came in higher than the $231.8 million Street estimate.

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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