Mid-Day ETF Update: ETFs, Stocks Extend Losses as Immigration Ban Unnerves Markets; Disappointing Earnings, Mixed Data Weigh

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

Direxion Daily Gold Miners Index Bull 3X Shares ( NUGT ): +7%

VanEck Vectors Gold Miners ETF ( GDX ): +2.5%

SPDR S&P 500 ( SPY ): -0.3%

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): +0.8%

Direxion Daily Junior Gold Miners Index Bull 3X Shares ( JNUG ): +5.1%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were lower. Actively traded PowerShares QQQ (QQQ) was down 0.6%.

U.S. stocks maintained losses at session's half, as the fallout from President Trump's executive order to ban immigrants from certain predominantly Muslim countries continued to sour market sentiment. The Dow was trading lower for a third consecutive day, while the S&P 500 and Nasdaq were both lower on losses in the industrial and technology sectors.

Wall Street was unsettled by the termination of acting attorney general Sally Yates, who told Justice Department lawyers not to defend Trump's immigration ban. Investors now worry about further political instability as new executive orders are signed.

Also weighing on markets were disappointing quarterly results from Wall Street heavyweights including Xerox (XRX), Exxon (XOM) and UPS (UPS), and especially Under Armour (UAA) which missed EPS and sales expectations, set 2017 guidance below the consensus estimate, and announced the departure of its CFO Chip Molloy.

In economic data news, the Chicago purchasing manager's index dropped to 50.3 in January from 54.6 the month prior, missing expectations for a gain to 55.3.

Consumer confidence fell by more than what was expected to 111.8 in January from a downward revised 113.3 in December, below expectations for a decline to 112.2.

Finally, home prices were up 0.9% in November according to the Case-Shiller monthly report, and the employment cost index was 0.5% higher in Q4, just missing +0.6% estimates.

Power Play: Health Care

Health care funds were higher, outperforming 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 up 1%.

Jaguar Animal Health (JAGX) was up 54.6% after the company said Eli Lilly's (LLY) unit Elanco US Inc has licensed Canalevia, a product candidate under investigation to treat acute and chemotherapy-induced diarrhea in dogs, for development and commercialization. Under the agreement, Elanco gains exclusive global rights to Canalevia, and Jaguar and Elanco will collaborate together on the global development of the product and on its commercialization in the US. Jaguar will receive an upfront payment of $1.5 million and additional payments upon achievement of certain development, regulatory and sales milestones up to $61 million payable throughout the term of the agreement; product development expense reimbursement, and royalty payments on global sales. Jaguar will supply the licensed products to Elanco, and the parties will agree to set a minimum sales requirement that Elanco must meet to maintain exclusivity.

Winners and Losers


Select Financial Sector SPDRs (XLF) was down 0.8%. Direxion Daily Financial Bull 3X shares (FAS) was down 1.5%, while its bearish counterpart, FAZ, was up 1.6%.

Nomura Holdings (NMR) was down 0.5% after it reported Q3 earnings and revenues that improved year-over-year and beat the average estimate provided by Capital IQ. For Q3 ended Dec. 31, the Japanese brokerage firm said net income was JPY70.3 billion ($602 million), soaring 99% year-over-year and beating the JPY66.20 billion average of two analysts. Revenues rose 4% year-over-year to JPY368.65 billion and were also above the JPY347.01 billion average.


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 negative territory. SPDR S&P International Technology Sector ETF (IPK) was down 0.02%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1.7% and Semiconductor Sector Index Fund (SOXX) was down 1.7%.

Rambus (RMBS) was down 7.3% after it said Q4 sales were $97.6 million, above the CapIQ mean for $96 million. Non-GAAP EPS were $0.16, meeting estimates. It sees Q1 sales between $93 million and $98 million and non-GAAP EPS between $0.13 and $0.17. Forecasts are for sales of $96 million and EPS of $0.15.


Dow Jones U.S. Energy Fund (IYE) was down 0.3% and Energy Select Sector SPDR (XLE) was down 0.4%.

Seadrill (SDRL) plunged 27% to the lowest since September after the oilfield-services company said it has not yet reached an agreement acceptable for all of its creditors. Negotiations with its secured lending banks, unsecured bondholders, and potential new money investors are still going on to amend and extend about $8 billion in first lien secured debt, the company said in a regulatory filing. The company proposed that this should be achieved by extending bank maturities to mature in the period from 2021 to 2023 and reducing fixed amortization and amending financial covenants, extending the maturity of unsecured claims to mature in the period from 2025 to 2028 and raising at least $1.0 billion in new capital. The company seeks to reach an agreement on restructuring before its West Eminence facility matures on April 30.


Crude was up 1.4%. United States Oil Fund (USO) was up 1.3%. Natural gas was down 2.9% while United States Natural Gas Fund (UNG) was down 3%.

Gold was up 1.4%. SPDR Gold Trust (GLD) was up 1.2%. Silver was up 2.2% while iShares Silver Trust (SLV) was up 2.1%.


Consumer staples funds were firmer, 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.

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

Under Armour (UAA) plummeted 25.2% after the company reported a Q4 earnings of $0.23 per diluted share compared with an income of $0.24 per share a year ago, lagging the $0.25 average EPS estimate from analysts polled by Capital IQ. Sales rose to $1.31 billion from $1.17 billion a year ago, but still coming in below the $1.41-billion consensus. In a statement released early Tuesday, the company said net revenues are expected to grow 11% to 12% to reach nearly $5.4 billion, up 12% to 13% on a currency-neutral basis. This compares with an average analyst estimate of $6.06 billion. Meanwhile, CFO Chip Molloy has decided to leave due to personal reasons. Effective February 3, David Bergman, senior vice president, corporate finance will serve as acting CFO.

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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