Mid-Day ETF Update: ETFs, Stocks Firmer on Crude Prices Surge, Upbeat Inflation Data

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

SPDR S&P 500 ( SPY ): +1.2%

iShares MSCI Emerging Index Fund ( EEM ): +1.6%

VIX Short-Term Futures ETN Ipath ( VXX ): -1.1%

SPDR Select Sector Fund - Financial ( XLF ): +2.1%

iShares Russell 2000 ETF ( IWM ): +1.2%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively-traded PowerShares QQQ (QQQ) was up 1.1%.

U.S. stocks were firmer at session's half, with market sentiment lifted by a rebound in crude oil prices and bullish inflation data.

Investors are expecting that the U.S. may lift its 40-year-old ban on crude exports - driving crude oil prices higher.

In economic data, the annual consumer price index for November reached the Fed's 2.0% target rate for the first time in over three years. Excluding food and fuel, consumer prices rose 0.2%, as-expected, during November.

The Empire State manufacturing index improved to negative 4.59 reading from negative 10.74 in December, beating the consensus view looking for a negative 7.0 reading this month. Readings under zero indicate contraction, where the index has lingered for five months.

Finally, the homebuilders' housing market index dropped a point this month to a 61 reading from November's 62, missing expectations for an 1-point increase to 63.

Power Play: Technology

Tech funds were higher, but slightly behind 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 lower. Meanwhile, SPDR S&P International Technology Sector ETF (IPK) was down 2.4%.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.6%, and Semiconductor Sector Index Fund (SOXX) was up 1.4%.

Wave Systems (WAVX) was up 71.4% after the company said it completed a financing agreement with Marble Bridge Funding Group, Inc. in the form of a secured accounts receivable and purchase orders financing facility of up to $3 million. The company has also engaged GrowthPoint Technology Partners to advise it in evaluating its strategic alternatives, including potential M&A opportunities. Advances on the accounts receivable facility will be made on qualified accounts receivables that are approved by Marble Bridge. The duration of this facility is for 12 months with an automatic 12-month renewal unless Wave terminates the facility or is in default with Marble Bridge. Advances on the purchase order facility can be made on qualified purchase orders or contracts approved by Marble Bridge that will convert into an account receivable within 45 days from funding. The duration of the purchase order facility is for 9 months or the termination of the credit facility, whichever occurs first. Wave issued a total of 5.5 million warrants to Marble Bridge and its co-lender of Class A common stock at an exercise price of $0.15 per share. The warrants cannot be exercised for a period six months after the effective date of the transaction and will expire on the fifth anniversary of the issue date.

Winners and Losers


Funds in the financial sector were weaker, lagging behind the broader market. Select Financial Sector SPDRs ( XLF ) was up 2.4%. Direxion Daily Financial Bull 3X shares (FAS) was up 6.5%; Direxion Daily Financial Bear 3X Shares (FAZ) was down 6.5%.

Verifone (PAY) was down 1.6% after it posted adjusted EPS of $0.49 a share, up from $0.44 a year earlier and beating the mean estimate compiled by Capital IQ by a penny. Revenues rose 5% year-on-year to $514 million, just beating the $512.9 million consensus. For Q1 2016, the company expects adjusted EPS of $0.45 on revenues of $500 million. Analysts are expecting EPS of $0.50 on sales of $505.9 million. Full-year adjusted EPS is seen at $2.15 to $2.17, just below the $2.18 mean estimate and revenues are forecast at $2.09 billion to $2.11 billion, in line to below the $2.11 billion consensus.


Energy funds were higher, in line with the broader market. Dow Jones U.S. Energy Fund (IYE) was up 3.1% and Energy Select Sector SPDR (XLE) was up 2.8%.

W&T Offshore Inc. (WTI) was up 4.5% after the oil and natural gas producer reported a "significant" discovery at its deepwater Ewing Banks 954 A-8 exploratory well in the Gulf of Mexico. The discovery was the company's second in its two-well drilling program from the EW 910 platform in the Gulf and W&T now expects to begin production from both wells early next year with a projected 2,300 barrels of oil equivalent each per day.


Crude was up 3.7%. United States Oil Fund (USO) was up 3.9%. Natural gas was down 2.9%. United States Natural Gas Fund (UNG) was down 3.3%. Gold was down 0.03% and SPDR Gold Trust (GLD) was up 0.03%. Silver was up 0.7% and iShares Silver Trust (SLV) was up 0.8%.

Health Care

Health care funds were in the green, in line with the broader market. Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were higher. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 3%.

Intercept Pharmaceuticals (ICPT) was up 16.5% after media outlets cited the Daily Mail as reporting the company has received buyout offers. The report said Intercept hired JPMorgan to handle the offers. One potential suitor is Shire plc (SHPG), according to the reports.


Consumer staples funds were in positive territory, matching the broader market. Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were in the red.

Consumer discretionary and retail funds were also firmer, below the broader market. Consumer Discretionary Select Sector SPDR (XLY), SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH) were higher.

Lumber Liquidators (LL) was up 25.8% after a hedge fund investor formerly critical of the company said he covered his short position, according to a report in The Wall Street Journal. The report cited a blog post on Seeking Alpha written by hedge fund manager Whitney Tilson of Kase Capital Management. Tilson started publicly questioning the sourcing practices of Lumber Liquidators in 2013 saying he would not cover his roughly $2.3 million bet against the company and he expected the stock to go to zero. The company has been scrutinized amid claims that some of its laminate flooring did not meet California's emissions standards on levels of formaldehyde. In his blog post Tilson said he has changed his mind about the company based on new information, which he said, "leads me to believe that senior management of Lumber Liquidators wasn't aware that the company was selling Chinese-made laminate that had high levels of formaldehyde."

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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