Mid-Day ETF Update: ETFs, Stocks Hold on to Modest Gains Even as Weakness in Energy Continues

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

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

VIX Short-Term Futures ETN Ipath ( VXX ): -0.9%

iShares MSCI Emerging Index Fund ( EEM ): +0.3%

SPDR Select Sector Fund - Financial ( XLF ): +0.3%

Daily Inverse VIX ST ETN Velocityshares ( XIV ): +0.8%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were modestly higher. Actively-traded PowerShares QQQ (QQQ) was up 0.5%.

U.S. stocks remained in positive territory, but were off session highs as weakness in the energy sector weighed on market sentiment. Earlier gains were spurred by new expectations that Chinese officials are planning additional stimulus for the country's sagging economy.

Meanwhile, in economic data news, the Chicago Fed national activity index for November declined to negative 0.3 from 0.17.

Power Play: Technology

Tech funds were higher, slightly outpacing 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 higher. SPDR S&P International Technology Sector ETF (IPK) was up 0.9%.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 1.1%, while Semiconductor Sector Index Fund (SOXX) was up 0.8%.

Apple (AAPL) was up 0.9% but earlier declined to the lowest price in almost four months following reports that analysts are expecting lower iPhone sales in 2016. Credit Suisse on Dec. 16 lowered estimates for iPhone sales by 3.6% to 214 million units, and cut its calendar-year earnings estimate by 4% due to supply-chain weakness. Morgan Stanley on Dec. 14 cut its sales estimates, citing oversaturation in several markets. The firm lowered its price target by 12% to $142 a share. Still, the company isn't exactly suffering, analysts said. Credit Suisse analyst Kulbinder Garcha said the firm believes Apple will have high retention rates, continued installed base growth and the optionality of a smaller 4-inch iPhone. The firm left in place its $140 price target.

Winners and Losers


Funds in the financial sector were firmer, matching the broader market. Select Financial Sector SPDRs ( XLF ) was up 0.3%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.6%; Direxion Daily Financial Bear 3X Shares (FAZ) was down 0.7%.

JP Morgan Chase & Co (JPM) was up 1% after agreeing to pay $150 million over the "London Whale" trading scandal, Reuters, Bloomberg and other media reported, citing court papers. Reuters said the settlement was disclosed on Friday and resolves a class action lawsuit related to the trading scandal that happened in 2012. The suit had charged JPMorgan hid as much as $6.2 billion in losses caused by the "London Whale."


Energy funds were lower,underperforming the broader market. Dow Jones U.S. Energy Fund (IYE) was down 0.8% and Energy Select Sector SPDR (XLE) was down 0.7%.

Dominion Resources (D) was down 0.7% after the company's Dominion Virginia Power and governor Terry McAuliffe reached an agreement to deploy 110 megawatts of solar power generation. The Commonwealth will purchase the solar-generated electricity through a long-term agreement with Dominion, Dominion said. Dominion Virginia Power will build up to 75 percent of the solar capacity and third party solar developers will develop 25% of the capacity. Timeline for construction and costs will be determined as individual projects are scoped and developed.


Crude was down 1%. United States Oil Fund (USO) was down 0.8%. Natural gas was up 6.9%. United States Natural Gas Fund (UNG) was down 6.3%. Gold was up 1.8% and SPDR Gold Trust (GLD) was up 1.3%. Silver was up 1.4% and iShares Silver Trust (SLV) was up 1.4%.


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 green.

Consumer discretionary and retail funds were also firmer, in line 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.

Sequential Brands Group (SQBG) was up 6.2% after it increased its full-year and 2016 revenue projections to reflect the recently completed merger with Martha Stewart Living Omnimedia (MSO). The company sees 2015 revenue of $85 - $87 million and $51 - $53 million of adjusted EBITDA. For 2016, it expects revenue of $145 - $150 million and $83 - $87 million of adjusted EBITDA. Analysts had forecast revenue of $83.4 million for 2015, rising to $110.7 million in 2016.

Sequential also said it sees significant tax benefits from the merger, with its total potential tax deductions

rising to $466 million, resulting in a tax benefit of $163 million.

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 0.1%.

Foundation Medicine (FMI) was up 9.6% after it said it has signed a national agreement with UnitedHealthcare, a business unit of health benefit administrator United Health Group (UNH), for its FoundationOne genomic profiling procedure for solid tumors. The agreement became effective December 15, and covers FoundationOne for patients with metastatic stage IV non-small cell lung cancer.

Separately, the company and Mirati Therapeutics (MRTX) jointly announced that they have entered into a collaboration with molecular information company Foundation Medicine (FMI) for the development of a companion diagnostic test for glesatinib. The test is designed for use by physicians and will be used to identify NSCLC patients most likely to respond to glesatinib.

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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