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Mid-Day ETF Update: ETFs, Stocks Continue Slump as Upbeat New-Home Sales, Consumer Confidence Fail to Offset Lackluster Earnings

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

SPDR S&P 500 ( SPY ): -1.23%

iPath S&P 500 VIX ST Futures ETN ( VXX ): +4.27%

iShares MSCI Emerging Markets Index ( EEM ): -0.66%

PowerShares QQQ Trust, Series 1 ( QQQ ): -2.26%

VelocityShares Daily 2X VIX Short Term ETN ( TVIX ):+6.71%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were sharply lower. Likewise, actively traded PowerShares QQQ ( QQQ ) was down 2.12%

U.S. stocks were also in negative territory at session's half, as increases in new-home sales and consumer confidence failed to lift market sentiment, which was weighed by lackluster earnings.

The Commerce Department reported that sales of new single-family homes rose 11.6% in December to a seasonally adjusted annual rate of 481,000 - topping estimates for an annual rate of 455,000. Consumer confidence also jumped in January to 102.9 from 93.1 in December - the best reading since August 2007, and above forecasts.

Earlier, the Commerce Department said orders for durable U.S. goods declined 3.4% in December, missing expectations. This was the fourth decline in the past five months.

Weak earnings results continued to put pressure on equities. Large cap losers include Caterpillar (CAT), Phillipns (PHG) and Freeport-McMoRan (FCX).

Power Play: Health Care

Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were weaker. Meanwhile, Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 0.27%.

STAAR Surgical Co. (STAA) tumbled 29.21% to an 11-month low after the maker of implantable lenses for the eyes said it expects Q4 revenues of $16.6 million, below the consensus of $20.23 million compiled by Capital IQ. The company said Q4 and full-year 2014 results are expected below expectations due to currency headwinds which will have a negative impact of approximately $0.6 million, and due to its inability to fulfill orders by the end of 2014. STAA also said it received a $2.0 million order from a large international distributor, which will be booked in Q1 2015. Despite the order, the company said it does not have sufficient visibility regarding Q1 2015 anticipated revenue.

Winners and Losers

Financial

Select Financial Sector SPDRs (XLF) was down 1.21%. Direxion Daily Financial Bull 3X shares (FAS) was down 3.43%, while Direxion Daily Financial Bear 3X Shares (FAZ) was up 3.06%.

First Cash Financial Services (FCFS) was down 7.75% after it reported Q4 GAAP EPS of $0.94, up 11.9% YOY, but below a street consensus of $0.98 compiled by Capital IQ, if comparable. FCFS, which operates more than 1,000 pawn shops in the U.S and Mexico, said that a strong U.S. dollar crimped reported earnings, while soft gold prices also cut revenues. FCFS reported Q4 net income of $26.9 million on revenues of $202.8 million, the latter figures a little below the street consensus of $205.8 million. FCFS initiated 2015 guidance by forecasting earnings from continuing operations of $2.75 to $2.90 per diluted share. The pawn shop operator said it has authorized a 2-million share buyback program, the equivalent of 7% of common outstanding.

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 weaker. SPDR S&P International Technology Sector ETF (IPK) was flat.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1.12% and Semiconductor Sector Index Fund (SOXX) was down 2.05%.

Industrial

Select Sector SPDR-Industrial (XLI), Vanguard Industrials (VIS), and iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ) were in negative territory.

E.I. du Pont de Nemours and Company (DD) was down 2.77% after it reported Q4 results that are in line with the Street view on EPS but missed the Street view on total revenues. The company reported Q4 adjusted EPS of $0.71, up from $0.51 in the same period a year ago and in line with analyst estimates of $0.71. Total revenues of $7.37 billion were down from $7.74 billion in Q4 2013 and fell short of analyst projections of $7.80 billion. The company expects 2015 operating earnings of $4.00 to $4.20 per share.The Street view for the year is $4.47 per share. Net sales rose to $2.40 billion from $1.96 billion a year earlier. Core net sales climbed to $2.60 billion from $2.01 billion a year earlier, topping the Street's mean estimate of $2.49 million.

Energy

Dow Jones U.S. Energy Fund (IYE) was up 0.05% and Energy Select Sector SPDR (XLE) was up 0.03%.

Peabody Energy (BTU) fell 5.8% to its lowest level in nearly 12 years after the coal company reported a wider-than-expected Q4 loss, guided for another wider-than-expected loss in Q1 and cut its quarterly dividend. The coal company said its adjusted loss was $1.21 per diluted share in the quarter compared with break-even earnings a year earlier, wider than the loss of $0.35 per share expected by analysts polled by Capital IQ. Revenue fell to $1.68 billion from $1.74 billion, slightly exceeding the $1.65 billion consensus estimate. The reported net loss from continuing operations widened to $478.8 million or $1.79 per diluted share from a loss of $401.1 million or $1.52 a year earlier.

Peabody also said it has cut its February 2015 quarterly dividend to $0.0025 per share, down from $0.085 the preceding quarter. For Q1, Peabody said it expects an adjusted diluted loss per share of $0.39 to $0.32, wider than the loss of $0.22 per share expected on average by the Street. The company also said U.S. revenue per ton is expected to decline due to lower Midwest pricing and a change in Western volume mix.

Commodities

Crude was up 2.04%; United States Oil Fund (USO) was up 2.02%. Natural gas was up 3.27% and United States Natural Gas Fund (UNG) was up 3.37%.

Gold was up 1.03%, and silver was up 0.48%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.9% and iShares Silver Trust (SLV) was up 0.93%.

Consumer

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

J & J Snack Foods (JJSF) was down 14.48% after the snack-food company late Monday reported fiscal Q1 earnings below analysts' expectations despite revenue that rose slightly more than expected. For the quarter ended Dec. 27, 2014, the company posted Q4 net earnings of $11.3 million, or $0.60 per diluted share, down from $12.4 million, or $0.66 per diluted share, for the quarter ended Dec. 28, 2013, and below the Street consensus according to Capital IQ of $0.70 per share. Revenue came in at $212.8 million, up from $203.5 million a year earlier and just above the Street view for $212.3 million.

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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