Mid-Day ETF Update: ETFs, Stocks Lower as Weak Earnings Season Looms; February Consumer Credit Still Ahead

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

SPDR S&P 500 ( SPY ): -0.92%

PowerShares QQQ Trust, Series 1 ( QQQ ): -0.96%

iShares Russell 2000 Index ( IWM ): -1.57%

iShares MSCI Emerging Markets Index ( EEM ): +0.31%

iShares MSCI Japan ( EWJ ): -0.66%

Broad Market Indicators

Most broad market exchange-traded funds were in negative territory. Actively traded PowerShares QQQ ( QQQ ) was down 0.96%.

U.S. stocks extended their weakness into the session's half, with the technology sector leading the losers, as investors continued to fret over forecasts that the coming earnings season will be disappointing. Aluminum producer Alcoa (AA) will be kicking off the earnings season when it reports its results in Tuesday's after hours session. U.S. consumer credit for February is due at 3 p.m. ET., with analysts expecting a year-over-year increase of about $14.1 billion. Other economic data out later in the week is expected to spur stock movement into positive territory - the Federal Open Market Committee will release the minutes from its latest meeting on Wednesday, while consumer sentiment data for April is scheduled to be reported on Friday.

Power Play: 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 lower. SPDR S&P International Technology Sector ETF (IPK) was down 0.31%.

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

In stocks news, Vocus (VOCS) climbed to an 18-month high, up some 47% after it said Monday it will be sold to GTCR's Valor Merger Sub affiliate for $446.5 million cash. GTCR Valor Merger Sub, Inc. will commence a tender offer to acquire all of the outstanding shares of VOCS' common stock for $18.00 per share, net to the holder of such share of VOCS common stock, in cash, without interest and subject to any applicable tax withholding and subject to other closing conditions. The offer price per share for common stock represents a premium of 48% over VOCS' closing share price on April 4, the last trading day prior to announcement, and a premium of 79% over the twelve-month volume weighted average share price for the period ended April 4. As part of the transaction, GTCR Valor Merger Sub, Inc. will also acquire all outstanding shares of VOCS' Series A Convertible Preferred Stock for its stated value of $77.3 million.

Winners and Losers


Select Financial Sector SPDRs (XLF) was down 0.09%, but was near its five-year high. Direxion Daily Financial Bull 3X shares (FAS) was down 0.9%. Its bearish counterpart, FAZ, was up 0.88%.

Among sector news, Genworth Financial (GNW) was down 5% after an investor filed a lawsuit alleging the wealth management and insurance company disseminated false and misleading public statements that resulted in artificially inflated share prices between February 3, 2012 and April 17, 2012. The claims target certain statements regarding GNW's outlook of its Australian mortgage insurance business and the company's stated ability to complete its Australian business unit IPO in Q2 of 2012. The plaintiff seeks to recover damages on behalf of all purchasers of GNW between the stated time frame.


Energy funds are firmer, outperforming the broader market. Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were both firmer, with both funds reaching new multi-year highs.

In corporate news, Cheniere Energy (LNG) was down 5% after it said Monday that its subsidiary, Corpus Christi Liquefaction, LLC has entered into a liquefied natural gas sale and purchase agreement with Endesa S.A. under which Endesa has agreed to purchase approximately 0.75 million tonnes per annum of liquid natural gas upon the commencement of operations from the liquid natural gas export facility being developed near Corpus Christi, Texas. Under the deal, Endesa will purchase liquid natural gas on a free on board (FOB) basis for a purchase price indexed to the monthly Henry Hub price plus a fixed component. Liquid natural gas will be loaded onto Endesa's vessels. The agreement has a term of twenty years commencing upon the date of first commercial delivery and an extension option of up to ten years. Deliveries are expected to occur as early as 2018. Deliveries are expected to occur as early as 2018.


Crude was down 0.70%; United States Oil Fund (USO) was down 0.65%. Natural gas was up 1.28%; United States Natural Gas Fund (UNG) was up 1.42%.

Gold was down 0.45% and silver was down 0.43%. Among rare metal funds, SPDR Gold Trust (GLD) was down 0.51%; iShares Silver Trust (SLV) was down 0.37%.


Consumer Staples Select Sector SPDR (XLP), Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were edging higher, nearing their multi-year highs.

Among stocks, Pandora (P) slipped some 4% despite receiving a ratings upgrade from Wedbush, to Outperform from Neutral, Monday. The move provided little traction for a stock that been sold off aggressively in recent weeks as investors moved out of so-called momentum stocks, including Pandora, at the end of Q1 and early in Q2. Wedbush kept its price target at $35 for the online music provider.

Healthcare and Biotechnology

Health care funds Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were in negative territory. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 2.76%.

In corporate news, Agios Pharmaceuticals (AGIO) was up some 26% after saying this weekend that data from a study on the AG-221 drug in patients with advanced blood cancers showed "promising" clinical activity. The purpose of the phase 1 program was to test safety and tolerability but also demonstrated "multiple complete remissions, in patients whose blood cancers carried an IDH2 mutation, even at the lowest tested dose," according to the lead investigator, Eytan Stein, at the leukemia service at Memorial Sloan-Kettering Cancer Center.

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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