Mid-Day ETF Update: ETFs, Stocks Hold on to Modest Gains Following Yellen's Hawkish Comments

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

SPDR Select Sector Fund - Financial ( XLF ): +0.8%

Direxion Daily Gold Miners Index Bull 3X Shares ( NUGT ): -3.2%

Direxion Daily Junior Gold Miners Index Bull 3X Shares ( JNUG ): -2.1%

VanEck Vectors Gold Miners ETF ( GDX ): -1.1%

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

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.1%.

U.S. stocks were modestly higher at session's half, as Wall Street digested Federal Reserve Chair Janet Yellen testimony before Congress on the state of the country's economy, constraining the indexes' recent rallies.

The Federal Open Market Committee "expects the evolution of the economy to warrant further gradual increases in the federal funds rate to achieve and maintain its employment and inflation objectives," Yellen said in her semiannual testimony on monetary policy.

Meanwhile, in economic data news, the producer price index rose 0.6% in January, versus forecasts for a 0.3% increase. Core producer prices, which excludes energy and food, rose 0.2%.

Power Play: Health Care

Health care funds were higher, behind the broader market. Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were in the red. Meanwhile, Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.8%.

Cynosure (CYNO) were surging 28% to a new 52-week high after medical device firm Hologic (HOLX) said it sealed an agreement to buy the company for $66 per share in cash, equal to an equity value of $1.65 billion and an enterprise value of $1.44 billion net of cash. The acquisition will be accretive to Hologic's adjusted EPS at a double-digit rate over the next couple of years and will also accelerate pro-forma revenue growth by about 150 basis points. Specifically, the the acquisition will add $0.03 to $0.05 to Hologic's FY17 adjusted EPS and $0.13 to $0.15 to its FY18 adjusted EPS, and become increasingly accretive in FY19 and beyond. Under the terms of the deal, Hologic said one of its subsidiaries will start a tender offer to acquire all outstanding CYNO shares for $66 per share in cash. The tender offer is slated for completion in late March or April.

Winners and Losers


Select Financial Sector SPDRs ( XLF ) was up 1.1%. Direxion Daily Financial Bull 3X shares (FAS) was up 2%, while its bearish counterpart, FAZ, was down 2.2%.

Credit Suisse (CS) was up 1.3% after it posted a loss in Q4 after taking a charge in the quarter for the settlement of a probe into activities of its US mortgage-securities business in the run-up to the 2008 global financial crisis. The bank posted a net loss of CHF2.35 billion ($2.34 billion) in Q4, according to results published on Credit Suisse's website on Tuesday. This was narrower than the CHF5.83 billion net loss posted in the corresponding quarter of the prior year but wider than the CHF2.02 billion loss expected by analysts in a Capital IQ poll. The lender also said is planning to cut between 5,500 and 6,500 jobs this year, according to news reports.


Tech stocks were higher, ahead of 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 in positive territory. Meanwhile, SPDR S&P International Technology Sector ETF (IPK) was down 0.2%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.2% and Semiconductor Sector Index Fund (SOXX) was down 0.1%.

Amkor Technology (AMKR) was down 8.6% after it reported late Monday Q4 sales of $1.022 billion, just shy of the analyst consensus of $1.036 billion on Capital IQ. Earnings were $0.42 per share, better than expectations of $0.27 per share, if comparable. For Q1, the company is targeting revenue of about $900 million, below Street estimates of $964.6 million. Earnings are seen in the range of a loss of $0.11 per share to a profit of $0.05 per share. The Street view is a profit of $0.11 per share on a non-GAAP basis and $0.09 per share on a GAAP basis.


Industrial funds Select Sector SPDR-Industrial (XLI), iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), and Vanguard Industrials (VIS) were lower, behind the broader market.

Aircastle (AYR) was up 9.1% after it reported Q4 revenue of $204.7 million, versus $208.3 million last year. This was above the $199.4 million Capital IQ estimate. EPS for the quarter were $0.90, compared to $0.67 in the same period last year. This beat the $0.53 Capital IQ consensus.


Dow Jones U.S. Energy Fund (IYE) was down 0.2% and Energy Select Sector SPDR (XLE) was down 0.3%.

Golar LNG (GLNG) was down 1.3% after it priced $350 million aggregate principal amount of its 2.75% convertible senior notes due 2022, in a private placement to qualified institutional buyers. The company has also granted the initial purchasers of the notes a 30-day option to buy up to an additional $52.5 million principal amount of the notes in connection with the offering, solely to cover overallotments. The offering is expected to close on Feb. 17.


Crude was up 0.5%. United States Oil Fund (USO) was up 0.7%. Natural gas was down 1% while United States Natural Gas Fund (UNG) was down 1.2%.

Gold was down 0.02%. SPDR Gold Trust (GLD) was down 0..2%. Silver was up 0.3% while iShares Silver Trust (SLV) was up 0.3%.


Consumer staples funds were weaker, behind the broader market. Consumer Staples Select Sector SPDR (XLP), Vanguard Consumer Staples ETF (VDC), and iShares Dow Jones US Consumer Goods (IYK) were lower.

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 green.

General Motors (GM) was up 4.7% after French carmaker PSA Group confirmed it is in talks with the US carmaker over various strategic initiatives, including a potential acquisition of GM's Opel unit. The parent of Peugeot said there are no guarantees that an agreement will be reached.

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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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