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Mid-Day ETF Update: ETFs, Stocks Higher as Sentiment Improves on Possible Break in Russia-Ukraine Conflict

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

SPDR S&P 500 ( SPY ): +0.37%

iPath S&P 500 VIX ST Futures ETN ( VXX ): -0.26%

Select Sector SPDR Fund - Financial ( XLF ): +0.18%

iShares MSCI Emerging Markets Index ( EEM ): +0.23%

PowerShares QQQ Trust, Series 1 ( QQQ ): +0.12%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were mostly higher at the session's half. Actively traded PowerShares QQQ ( QQQ ) was up 0.12%.

U.S. stocks were also firm as concerns over the Russia-Ukraine conflict eased following reports that Russia is planning to de-escalate tensions in Ukraine. Even as the potential for a resolution to one geopolitical issue is seen, other conflicts are poised to come to the fore - late Thursday, President Barack Obama authorized targeted airstrikes and emergency-assistance missions in northern Iraq in response to the ISIS violence in the region. Meanwhile, Israel has ordered its military to resume operations in the Gaza strip, claiming that Hamas had violated a 72-hour cease-fire.

Nevertheless, market sentiment improved, with investors welcoming the latest Q2 productivity data, which showed a growth of 2.5%, compared with a revised 4.5% drop in Q1. This was a much larger gain than the expected 1.7% increase. On the other hand, Q2 unit labor costs came in below forecasts, up 0.6% compared with Street estimates expecting a 1.6% gain. Q1 labor costs also were revised by more than twice the original -- to +11.8% from +5.7% originally. Finally, wholesale inventories were up by 0.3% in June, missing estimates for a 0.7% gain. Sales rose 0.2% versus estimates of a 0.7% increase.

Power Play: Consumer

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

Ignite Restaurant Group (IRG), the parent company for Joe's Crab Shack and Macaroni Grill, reported a big miss on earnings and revenue, dragging the stock down some 30% Friday morning to an all-time low of $7.60. After the close on Thursday, the company reported Q2 2014 non-GAAP adjusted net income of $2.0 million, or $0.08 per share, missing Capital IQ estimates of $0.24 per share. For the same quarter last year, the company reported net income of $973,000 or $0.04 per share. Revenue totaled $229.8 million, missing Cap IQ estimates of $239 million, but up slightly from $228 million for Q2 2013. IRG shares were down nearly 32%.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.18%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.64% while its bearish counterpart, FAZ, was down 0.64%.

Royal Bank Scotland (RBS) was up 2.48% after a report in the WSJ stated the bank is disbanding its controversial Global Restructuring Group. Derek Sach, the head of the division, will leave the bank, as will Aubrey Adams, who heads up the property function within GRG, people familiar with the matter told the WSJ.

Laura Barlow has been named to head up RBS's restructuring activities, the story said. Her team will work alongside the group's existing businesses to help clients who are struggling with repayments. Some of the asset that are currently being restructured are being moved to the state-owned bank's "bad bank," these people reportedly said.

Separately, media have reported that RBS Chairman Sir Philip Hampton is preparing his exit amid mounting expectations he will move to the same role at GlaxoSmithKline (GSK). The switch by Hampton to the top role at Britain's biggest pharmaceutical company is expected to be confirmed next month. The RBS chairman has been facing questions about his intentions to remain at the 81% taxpayer-owned bank since Stephen Hester quit as chief executive in June 2012, the Guardian said.

Technology

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 higher. SPDR S&P International Technology Sector ETF (IPK) was flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) were both up 0.86% .

ShoreTel (SHOR) was up 16.31% after it reported late Thursday that for Q4, or the quarter ended June 30, 2014, financial results topped analysts' expectations. Q4 GAAP net income was $2.1 million, or $0.03 per diluted share, compared with GAAP net loss of $2.3 million, or $0.04 per share in the prior-year period. Non-GAAP net income was a record $4.9 million, or $0.08 per diluted share, versus $3.4 million, or $0.06 per share in the comparable quarter the previous year. The Capital IQ analyst estimate is for $0.05 EPS. Revenue was $88.6 million, up 4% from $85.6 million in the same quarter last year. Analysts were expecting revenue of $85.76 million.

The company expects Q1 revenue of $84 million - $89 million, versus the Street view of $84.76 million.

Energy

Dow Jones U.S. Energy Fund (IYE) was up 0.65%; Energy Select Sector SPDR (XLE) was up 0.77%.

Clean Energy Fuels (CLNE) was down 6.1% despite reporting late Thursday Q2 results that beat analysts' estimates. The company's Q2 loss was $0.28 per share, ex one-time items, narrower than the Capital IQ consensus estimate of $0.30 loss per share. Revenue of $98.1 million also topped the consensus of $92.57 million. In the prior year period, the company reported a loss of $0.07 per share on revenue of $88.12 million.

Commodities

Crude was up 0.03%; United States Oil Fund (USO) was down 0.22%. Natural gas was up 2.06% and United States Natural Gas Fund (UNG) was up 1.68%.

Gold was up 0.04%, and silver was down 0.10%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.02% and iShares Silver Trust (SLV) was down 0.05%.

Health Care

Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were in the green. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 1%.

Raptor Pharmaceutical (RPTP) climbed 23% after the company reported late Thursday a loss of 0.15 per share, narrower than the Capital IQ consensus estimate of $0.21 loss per share. Revenue was $16.31 million, topping the forecasts for $14.73 million.

PROCYSBI net product sales for FY14 are now expected to be $65 million - $70 million, from its previous guidance range of $55 million - $65 million.

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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