Mid-Day ETF Update: ETFs, Stocks Lower on Fresh Declines in Crude Oil as EIA Cuts 2016 Price Forecast

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

SPDR S&P 500 ( SPY ): -0.6%

SPDR Select Sector Fund - Financial ( XLF ): -1%

VIX Short-Term Futures ETN Ipath ( VXX ): +1%

iShares MSCI Japan Index Fund ( EWJ ): -2.3%

PowerShares QQQ Trust, Series 1 ( QQQ ): -2.7%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were lower. Actively-traded PowerShares QQQ ( QQQ ) was down 2.7%.

U.S. stocks were lower as crude oil prices once again slumped following the news that he U.S. Energy Information Administration cut its 2016 forecasts for West Texas Intermediate and Brent Crude; West Texas Intermediate crude price to an average of $37.59 a barrel this year from the previous forecast price of $38.54. For Brent crude, it sees an average price of $37.52 a barrel versus the prior forecast of $40.15.

In economic data news, the Labor Department said job openings rose 5% to 5.6 million in December, with hires rising to 5.36 million from 5.25 million. And, wholesale inventories for December fell 0.1% to a seasonally adjusted $582 billion - the third straight month of decline. Sales for wholesalers fell 0.3% in December. From December 2014 to December 2015, wholesale sales sank 4.5%.

Power Play: Consumer

Consumer staples funds were in negative territory, in line with 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 weaker, but above 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 lower.

Viacom (VIAB) was down 15.2% after it reported Q1 net income of $449 million, or $1.13 per share; down from $500 million, or $1.20 per share in Q1 2015. On an adjusted basis, net income for the quarter was $1.18 per share, down from $1.29 per share in the prior year period but came in higher than the $1.17 per share Street estimate provided by Capital IQ. Revenues were $3.15 billion, down from $3.34 billion reported for the same period last year and lower than the $3.26 billion Street estimate.

Winners and Losers


Funds in the financial sector were weaker, below the broader market. Select Financial Sector SPDRs ( XLF ) was down 0.9%. Direxion Daily Financial Bull 3X shares (FAS) was down 2.5%; Direxion Daily Financial Bear 3X Shares (FAZ) was up 2.3%.

HCP (HCP) was down 15.5% after it reported Q4 adjusted funds from operations rose to $0.80 per share from $0.79 a year ago, exceeding the $0.78 average estimate from analysts polled by Capital IQ. Revenue rose to $668 million from $603.5 million and beat the $641.5 million consensus. On a reported basis, HCP swung to a net loss of $599.2 million or $1.29 per diluted share from a profit of $196.1 million or $0.43 a year earlier. For 2016, HCP said it expects FFO of $2.74 to $2.80, straddling the $2.71 average estimate while EPS is seen ranging between $1.49 and $1.55 compared to the $1.90 consensus.


Tech funds turned negative, giving up earlier gains, but outrperforming 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 weaker. SPDR S&P International Technology Sector ETF (IPK) was down 0.01%.

Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.3%, while Semiconductor Sector Index Fund (SOXX) was down 0.7%.

Qualys (QLYS) was down 21.9% after it reported Q4 non-GAAP net income of $7.8 million and earnings per diluted share of $0.21, topping the average of estimates compiled by Capital IQ for $0.17. A year earlier income was $5.6 million, or $0.15 per share, for the same quarter in 2014. Revenue rose 22% to $44.4 million, almost in line with the Street view for $44.6 million. For Q1 2016, Qualys sees revenue in the range of $44.7 million to $45.4 million and non-GAAP EPS of $0.14 to $0.16. The Street sees revenue of $46.3 and EPS of $0.18. For FY, the company expected revenue between $195.6 million to $198.6 million and EPS of $0.74 to $0.79. Analysts expect revenue of $202.2 million and EPS of $0.81.


Energy funds were in the red, underperforming the broader market. Dow Jones U.S. Energy Fund (IYE) was down 3.1% and Energy Select Sector SPDR (XLE) was down 3.2%.

Plains GP Holdings (PAGP) slumped 25.1% to a fresh record low after the company posted late Monday Q4 net income of $25 million,down from $82 million in the year-ago quarter. On a share basis, earnings fell to $0.11 per share from $0.13 per share a year earlier, missing the $0.18 consensus compiled by Capital IQ. Revenues fell sharply to $5.00 billion from $9.46 billion, well below the $7.48 billion mean estimate.


Crude was down 3.8%. United States Oil Fund (USO) was down 5%. Natural gas was down 1%. United States Natural Gas Fund (UNG) was down 0.5%. Gold was down 0.1% and SPDR Gold Trust (GLD) was up 0.6%. Silver was up 0.2% and iShares Silver Trust (SLV) was up 0.8%.

Health Care

Health care funds were lower, in line with the broader market. Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were weaker. Meanwhile, Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 0.7%.

Enanta Pharmaceuticals (ENTA) was up 13.5% despite reporting that Q1 net income that fell to $26.2 million, or $1.36 per diluted share, from $42.0 million or $2.18 per diluted share, for the year-earlier period. Q1 revenue decreased to $48.4 million from $77.5 million year-over-year. Analysts on average had projected earnings of $1.13 per share on revenue of $47.05, according to Capital IQ data.

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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