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Mid-Day ETF Update: ETFs, Stocks Edge Lower on Weak Consumer Sentiment, Decline in Consumer Spending

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

iShares MSCI Emerging Markets Index ( EEM ): -1.23%

SPDR S&P 500 ( SPY ): +0.06%, hit an all-time high

iShares Russell 2000 Index ( IWM ): -0.32%

PowerShares QQQ Trust, Series 1 ( QQQ ): +0.13%, reached its 13-year high

Market Vectors Gold Miners ( GDX ): -1.21%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were weaker, but still reaching record or multi-year highs. Actively traded PowerShares QQQ ( QQQ ) edged up 0.13%, also reaching a 13-year high.

U.S. stocks' earlier gains fizzled at session's half, but not before the S&P 500 hit another intraday high. Downbeat economic data weighed on market sentiment. The University of Michigan reported that its consumer-sentiment survey fell to a final May reading of 81.9 from a final April level of 84.1, missing estimates. Earlier, the Commerce Department said consumer spending slipped a seasonally adjusted 0.1% in April; this compares to March's revised 1% increase - the largest jump since 2009. Personal incomes rose 0.3% for the month.

Power Play: Technology

Technology Select Sector SPDR ETF (XLK) and iShares Dow Jones US Technology ETF (IYW) both hit their 13-year highs; iShares S&P North American Technology ETF (IGM) and iShares S&P North American Technology-Software Index (IGV) were lower. SPDR S&P International Technology Sector ETF (IPK) was up 0.25%, near a 3-month high.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) edged higher.

In corporate news, NQ Mobile (NQ) was up 17% after the provider of mobile Internet services said it expects Q1 net revenue above its prior guidance and forecast Q2 revenue will be twice the amount it brought in a year earlier. The company said it agreed to sell a minority interest in its FL Mobile wholly owned subsidiary. NQ was up 11% at $7.56 in recent trading shortly after the open, near the low end of its 52-week range of $6.25 to $25.90.

For Q1, the company said it now expects net revenue to exceed its prior guidance range of $75 million to $76 million, an increase of more than 125% over the prior-year comparable period. The company said it benefited from "continued strength in its businesses, in particular in the enterprise segment." Just one analyst estimate was available via Capital IQ: $75 million.

For Q2, it forecast net revenue of $83 million and $84 million, versus $41.4 million in the prior-year period. That is above the $78 million estimate of the one analyst. The company said its sales in the period have been "bolstered by strong underlying business trends and continued financial visibility."

Separately, the company agreed to sell up to 5.88% of FL Mobile, or up to a total of $25 million, consisting of $15 million to Bison Capital division Bison Mobile and $10 million from other investors, at a pre-money valuation of $400 million dollars or post-money valuation of $425 million.

Winners and Losers

Financial

Select Financial Sector SPDRs (XLF) was up 0.13%, near multi-year highs. Direxion Daily Financial Bull 3X shares (FAS) was up 0.19%. Its bearish counterpart, FAZ, was down 0.26%.

Among sector news, CoreSite Realty (COR) was up nearly 1% after maintaining its cash dividend of $0.35 per share on common stock and common stock equivalents for Q2. The Q2 common stock dividend will be paid on July 15 to shareholders of record on June 3.

The company further declared a cash dividend of $0.4531 per share of Series A Cumulative Redeemable Preferred Stock, also in line with its Q1 dividend for this type of stock. The preferred share dividend will be paid on July 15 to shareholders of record on June 30.

Energy

Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were weaker, but near their record highs.

Among stocks, Total (TOT) was off 0.24% after it said it has agreed to sell its 10% stake in the Shah Deniz field and the South Caucasus Pipeline to Turkey's state-owned exploration and production company TPAO for $1.5 billion. Shah Deniz is operated by BP, which owns 28.83%, with partners SOCAR (16.67%), Statoil (15.5%), Lukoil (10%) Nico (10%) and TPAO (9%).

Commodities

Crude was down 0.81%; United States Oil Fund (USO) was down 0.90%. Natural gas was down 0.61% and United States Natural Gas Fund (UNG) was down 1.07%.

Gold was down 1.12% and silver was down 1.49%. Among rare metal funds, SPDR Gold Trust (GLD) was down 1.03% and iShares Silver Trust (SLV) was down 1.86%.

Health Care

Health Care SPDR (XLV) iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) edged higher. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 0.40%.

In corporate news, Retrophin (RTRX) climbed more than 25% after the company said late Thursday it has signed a binding commitment on a $40 million senior secured term loan facility, provided by Athyrium Capital Management. The company has also entered into definitive purchase agreements with a group of institutional investors for the purchase and sale of $40 million of 4.5% Senior Convertible Notes due 2019.

In a separate release, Retrophin said it has entered into a license agreement with Mission Pharmacal Company, a private company based in San Antonio, Texas, for U.S. marketing rights to Thiola (tiopronin). Financial terms of the agreement were not immediately disclosed.

Consumer

Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were firmer and near their multi-year highs.

Retail ETFs SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) climbed to record highs. PowerShares Dynamic Retail (PMR) was flat.

Among stocks, Pacific Sunwear (PSUN) was down 18%, marking a 52-week low at $2.17, after the company gave weaker-than-expected Q2 guidance. The clothing retailer said late Thursday that it expects Q2 sales between $200 million and $210 million, below forecasts for $216 million. The non-GAAP loss is seen at between $0.02 and $0.08 per share, below expectations for a $0.02 gain. It reported Q1 sales were $171.1 million, compared with the mean Bloomberg estimate for $171 million. Non-GAAP loss was $0.11 per share, better than forecasts for a $0.13 loss.

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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