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Mid-Day ETF Update: ETFs, Stocks Extend Losses as Fears of US Economy Slowdown Grow After Weaker Foreign Trade

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

iShares MSCI Emerging Index Fund ( EEM ): -0.8%

SPDR S&P 500 ( SPY ): -0.01%

SPDR Select Sector Fund - Financial ( XLF ): +0.5%

iShares China Large-Cap ETF ( FXI ): -1.5%

ProShares UltraPro Short QQQ ( SQQQ ): +0.6%

Broad Market Indicators

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

US stocks continued to retreat at session's half as the widening trade deficit offered the latest sign of a slowdown in growth in the world's biggest economy.

The Census Bureau reported the deficit in the balance of trade in goods widened almost 13% in December to $79.5 billion from a month earlier after exports dropped 2.8% while imports rose 2.4%. The larger gap adds to weaker economic gauges in recent days that included retail sales, business spending plans on capital goods and housing starts.

In Washington, DC, Federal Reserve Chairman Jerome Powell is being quizzed for a second day on Capitol Hill, testifying before the House Financial Services Committee after answering questions from a Senate panel on Tuesday.

In earnings news, WW International (WTW) plummeted 36%, the steepest one-day loss in more than four years as the company formerly known as Weight Watchers reported late on Tuesday earnings and revenue that fell short of analysts' expectations.

Best Buy (BBY) jumped 14% after fourth-quarter earnings came in better than expected, with same-store sales also beating forecasts. Lowe's (LOW) gained 2.2% as the home improvement retail chain reported fourth-quarter earnings that came in ahead of expectations and revenue that increased to $15.65 billion from $15.49 billion a year earlier.

Power Play: Consumer

Consumer Staples Select Sector SPDR (XLP) was down 0.3% and Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones U.S. Consumer Goods (IYK) were lower.

Consumer Discretionary Select Sector SPDR (XLY) was down 0.04% while retail funds SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) were higher.

Campbell Soup (CPB) rose more than 9% as i t report ed adjusted net income per share of $0.77 for fiscal Q2, lower than the $1.00 it posted in the prior-year quarter, but above the $0.70 consensus EPS estimate provided by Capital IQ. The company posted a 24% increase in fiscal Q2 net sales to $2.71 billion, from $2.18 billion in the year-ago period, beating the $2.66 billion CapIQ consensus revenue estimate. Organic net sales, or net sales excluding the impact of currency and acquisitions, for the most recent quarter was $2.18 billion. Campbell also reaffirmed the 2019 guidance it provided in August 2018, where it expects net sales for 2019, pre-divestitures, to be in the $9.98 billion to $10.10 billion range and adjusted EPS to be in the $2.45 to $2.53 range.

In a separate statement late Tuesday, the company said it signed a definitive agreement for the sale of Garden Fresh Gourmet to an affiliate of Fountain of Health USA, a maker of hummus, dips, variety packs, prepared salads, pates and frozen desserts. Financial details of the transaction were not disclosed. The deal is expected to close in Campbell's fiscal 2019 third quarter, subject to customary closing conditions.

Winners and Losers

Financial

The Select Financial Sector SPDRs ( XLF ) was up 0.4%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.5% and its bearish counterpart Direxion Daily Financial Bear 3X shares (FAZ) was down 0.4%.

Global Net Lease Inc. (GNL) was down nearly 6% after it reported Q4 core FFO per common share of $0.50 from $0.51, a penny ahead of the consensus estimate compiled by Capital IQ, while revenue fell short of the mean estimate. The company said revenue in the period rose to $71.23 million from $66.6 million a year earlier, below the $74.2 million mean estimate compiled by CapIQ.

Technology

Technology Select Sector SPDR ETF (XLK) was down 0.3%, while tech funds iShares Dow Jones US Technology ETF (IYW) and iShares S&P North American Technology ETF (IGM) were in the red.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1.2% and Semiconductor Sector Index and (SOXX) was down 1.1%.

Benefitfocus (BNFT) fell more than 13% after it commenced an underwritten secondary offering of 5,704,758 common Benefitfocus shares, to be offered by certain funds managed by Goldman Sachs (GS) and Mercer. The selling shareholders also granted the underwriters a 30-day option to purchase up to 855,714 additional shares at the same offering price. Benefitfocus also reported earnings per share of $0.14 in Q4 after a loss of $0.06 in the year-earlier period, beating the $0.10 estimate compiled by Capital IQ. Revenue in the period rose to $74.77 million from the $67.88 million a year earlier, ahead of Street estimates for $73.03 million.

In Q1, management sees revenue in the range of $66.5 million to $68.5 million with adjusted EBITDA in the range of ($0.5) million to $1.5 million. The Street view is $71.5 million in revenue. For the full year, revenue is expected to be in the range of $301 million to $309.0 million as adjusted EBITDA is guided in the range of $15 million to $20 million. The Street view is $297.5 million in revenue

Energy

Dow Jones US Energy Fund (IYE) was up 1% and Energy Select Sector SPDR (XLE) was up 0.9%.

Gran Tierra Energy (GTE) rose more than 2% after it reported Q4 net loss of $0.03 per share which is narrower than the loss of $0.10 per share recorded in the same period a year ago. Analysts polled by Capital IQ were expecting adjusted earnings of $0.06 per share for the December quarter and GAAP earnings of $0.08 per share. The Canadian-based energy exploration company posted oil and gas sales of $136.6 million, up from $127.2 in the comparable period last year. The CapIQ average was for total sales of $154.4 million, if comparable. The company said that it now expects production of 41,000 to 43,000 barrel of oil equivalent per day (BOE/D) in 2019 compared to the previous guidance of 40,000 to 42,000 BOE/D.

Commodities

Crude was up 3.2%. United States Oil Fund (USO) was up 2.8%. Natural gas down 0.4% while United States Natural Gas Fund (UNG) was up 0.4%.

Gold was down 0.6%. SPDR Gold Trust (GLD) was down 0.8%. Silver was down 1.1%, while iShares Silver Trust (SLV) was down 1.3%.

Health Care

Health Care SPDR (XLV) was down 0.4% and other health care funds including Vanguard Health Care ETF (VHT) and iShares Dow Jones U.S. Healthcare (IYH) were lower. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 1.4%.

Mylan (MYL) fell more than 13% after reporting Q4 adjusted EPS fell to $1.30 from $1.43 a year earlier, underperforming analysts' estimates of $1.36 in a Capital IQ poll. Revenue fell 5% to $3.08 billion from a year ago, driven by lower sales in North America, and lagging the $3.095 billion estimate. For 2019, the generics drugmaker said it expects revenue of $11.5 billion to $12.5 billion and adjusted EPS of $3.80 to $4.80, compared with CIQ consensus of $5.02 for EPS on revenue of $11.87 billion.

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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