Mid-Day ETF Update: ETFs, Stocks Higher as Gains in Energy, Banking Outshine Geopolitical, Hurricane Irma Worries

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

SPDR Select Sector Fund - Financial ( XLF ): +0.02%

SPDR S&P 500 ( SPY ): +0.2%

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): -1%

iShares MSCI Emerging Index Fund ( EEM ): +0.5%

ProShares Trust Ultra VIX Short Term Futures ETF ( UVXY ): -1.8%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.02%.

US stocks were higher at session's half, buoyed by gains in the banking and energy sectors, and in spite of lingering concerns over geopolitical tensions in the Korean peninsula and worries over the impact of Hurricane Irma as it makes landfall, as well as the unexpected resignation of Federal Reserve Vice Chairman Stanley Fischer.

Economic data was bullish and mildly supportive of stocks. The U.S. trade deficit widened slightly to $43.7 billion from a revised $43.5 billion deficit as exports were down 0.3% while imports were down just 0.2%.

The services sector, the economy's largest employer, continued to show strength according to a pair of indices. The final August purchasing managers index increased to 56.0 from July's 54.7 while the Institute for Supply Management non-manufacturing index rose to 55.3 from 53.9, previously.

Crude oil prices rose as producers brace for the potential disruption to U.S. oil production from Hurricane Irma. Traders are also anticipating renewed demand for crude as refineries restart their operations in the Gulf Coast in the aftermath of Hurricane Harvey.

Power Play: Health Care

Health care funds Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH), were firmer. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.4%.

Verastem (VSTM) surged 28.4% after a phase 3 study of duvelisib in patients with relapsed or refractory chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL) showed that the primary endpoint of progression free survival showed superiority over ofatumumab. The company said it plans to file a new drug application for the drug with the Food and Drug Administration in the first half of 2018. The company also said that duvelisib has been granted fast track designation by the FDA, for the treatment of patients with peripheral T-cell lymphoma, who have received at least one prior therapy.

Winners and Losers


Select Financial Sector SPDRs ( XLF ) was up 0.1%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.5% and its bearish counterpart, FAZ, was down 0.4%.

MarketAxess Holdings (MKTX) declined 5% eporting a 1.2% drop in its monthly trading volume from the prior month during August and a 9.2% increase compared with year-ago levels.


Tech funds 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.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.1% while Semiconductor Sector Index Fund (SOXX) was up 0.3%,

American depository shares of Trivago (TRVG) slumped some 16% to a new record low after the Dutch hotel search platform said it now expects results for Q3 and the remainder of the year to be softer than previously anticipated. The company now expects annual revenue growth of 40%, and adjusted EBITDA to be lower than in 2016. The company previously expected revenue growth of 50%.


Dow Jones U.S. Energy Fund (IYE) was up 1.6% and Energy Select Sector SPDR (XLE) was up 1.6%.

Spark Energy (SPKE) was down 4.8% as the company said that while it is unable to assess "the full financial impact of the storm, if any, at this point, the company's operations continue to be running at full strength." The retail energy services company said it kept the business up and running through its emergency operations and "served customers without disruption" during the storm.


Crude was up 1%. United States Oil Fund (USO) was up 1.3%. Natural gas was up 1.1% while United States Natural Gas Fund (UNG) was up 1.2%. Gasoline was down 2% and United States Gasoline Fund (UGA) was down 1.3%.

Gold was down 0.5%. SPDR Gold Trust (GLD) was down 0.2%. Silver was down 0.03%, while iShares Silver Trust (SLV) was up 0.2%.


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

Consumer Discretionary Select Sector SPDR (XLY) and retail funds SPDR S&P Retail (XRT), PowerShares Dynamic Retail (PMR) and Market Vectors Retail ETF (RTH), meanwhile, were also positive.

Fred's (FRED) rose more than 9% after the pharmacy store operator reported fiscal Q2 net loss of $0.78 per share, compared to a net loss of $0.18 per share in the prior year period. Excluding certain special items, net loss for the quarter would have been $0.15 loss per share. Capital IQ provided a Street estimate of $0.19 loss per share. Net sales for the quarter ended July 29 were $507.8 million, down from $529.5 million reported for the same period last year. The Street estimate was for revenues of $504.9 million.

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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