Markets

Mid-Day ETF Update: ETFs, Stocks Lower on Weak Housing Data, Mixed Earnings

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

SPDR Select Sector Fund - Financial ( XLF ): -0.02%

Direxion Daily Gold Miners Index Bull 3X Shares ( NUGT ): -8%

VelocityShares 3X Inverse Natural Gas ETN ( DGAZ ): +1.3%

Direxion Daily Junior Gold Miners Index Bull 3X Shares ( JNUG ): -7.6%

VanEck Vectors Gold Miners ETF ( GDX ): -2.7%

Broad Market Indicators

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

U.S. stocks were lower at session's half, even as the Dow remained higher after crossing the historic 20,000 milestone, following mixed earnings and bearish housing and labor market data.

A 10.4% drop in new home sales in December weighed on market sentiment as the seasonally-adjusted annual rate of 536,000 last month was the third lowest of 2016. The decline also drove up the existing inventory of new homes as it will now take 5.8 months to exhaust the current supply of homes, up from 5.0 months in November.

Earlier, the government said jobless claims jumped a larger-than-expected 22,000 for the week ended Jan 21, but the purchasing manager's flash services sector index for January rose to 55.1, beating expectations for an increase to 54.4 from December's 53.9.

The Chicago Fed manufacturing index shot up to a positive 0.14 in December from a negative 0.33 the month prior while the Kansas City Fed manufacturing index improved to 20 from a revised 18 in December, previously reported as 24.

Wholesale inventories rose 1.0%, and leading economic indicators increased 0.5%, both of which were in-line with expectations.

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 in negative territory, but earlier hit new 52-week highs. SPDR S&P International Technology Sector ETF (IPK) was down 0.1%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 1% and Semiconductor Sector Index Fund (SOXX) was down 0.9%; both also neared 52-week highs.

eBay (EBAY) was up 4.6% after it said Q4 non-GAAP EPS were $0.54, a penny above the CapIQ mean and up four cents from last year. Sales rose 3% to $2.395 billion from last year and missed forecasts for $2.399 billion. Q1 sales are seen between $2.17 billion and $2.21 billion, about in line to below estimates for $2.215 billion. Non-GAAP EPS are seen between $0.46 - $0.48, below the Street's $0.50. FY17 sales are seen between $9.3 billion and $9.5 billion, in line with estimates for $9.37 billion. Non-GAAP EPS are seen between $1.98 - $2.03, below expectations for $2.06.

Winners and Losers

Financial

Select Financial Sector SPDRs ( XLF ) was up 0.02%. Direxion Daily Financial Bull 3X shares (FAS) was down 0.1%, while its bearish counterpart, FAZ, was up 0.02%.

The Royal Bank of Scotland (RBS, RBS.L) was up 1.4% even as it said it will take additional 3.1 billion pounds ($3.8 billion) of provisions for the fourth quarter of last year to cover the costs arising from a US Department of Justice investigation and legal action relating to RBS's sale of residential mortgage-backed securities (RMBS) in the US in the run-up to the global financial crisis. The amount set aside takes the total of such provisions to 6.7 billion pounds at the end of December, the bank said in a statement on Thursday. The size of the provision is "subject to any increase being required by intervening developments," it said. The bank said the additional provision will reduce its tangible net asset value per share as of the end September by 27 pence to 3.11 pounds and the CET1 capital ratio for the third quarter by 135 basis points to 13.6%.

Industrial

Industrial funds Select Sector SPDR-Industrial (XLI), iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), Vanguard Industrials (VIS) were all in negative territory but earlier reached new 52-week highs.

Raytheon Company (RTN) was down 3.6% after the company reported a Q4 earnings of $1.84 per diluted share compared with an income of $1.85 per share a year ago, lagging the $1.86 average EPS estimate from analysts polled by Capital IQ. Sales over the three months that ended Dec. 31 fell to $6.24 billion from $6.33 million a year ago, coming in below the $6.57-billion consensus. Looking forward, the net revenue is now expected to come in a range of $24.8 - $25.3 billion and the EPS from continuing operations at $7.20 - $7.35. That compares with average analyst estimates of $24.53 billion in sales and $7.50 in EPS.

Energy

Dow Jones U.S. Energy Fund (IYE) was up 0.1% and Energy Select Sector SPDR (XLE) was up 0.5%.

Bonanza Creek Energy (BCEI) was down 1.8% after the company said in a regulatory filing it has settled with Silo Energy related to its bankruptcy. Among other things, it said Silo's unsecured claim will be allowed in the amount of $75 million and Silo will receive a distribution of new common stock, unless Bonanza elects to pay such distribution in cash of $2.7 million. Silo may keep the roughly $5.035 million payment and is not required to turn over the approximately $8.738 million January payment for the December 2016 production month. The debtors will pay about $4.528 million in cash to Silo on the effective date

Commodities

Crude was up 2%. United States Oil Fund (USO) was up 2%. Natural gas was up 2.7% while United States Natural Gas Fund (UNG) was up 2.5%.

Gold was down 0.9%. SPDR Gold Trust (GLD) was down 0.9%. Silver was down 1.2% while iShares Silver Trust (SLV) was down 1%.

Consumer

Consumer staples funds were weaker, lagging 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.

Likewise, 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.

Royal Caribbean Cruises (RCL) was up 8.4% after it reported Q4 adjusted diluted earnings per share of $1.23, up from $0.94 in the same period last year, and ahead of the Capital IQ consensus forecast of $1.21. Revenues for the quarter were 1.91 billion, up from $1.90 billion, but below the analyst forecast of $1.97 billion The company said that foreign exchange and fuel prices are creating headwinds. For its full-year 2017 guidance, the company expects adjusted EPS to be in the range of $6.90 - $7.10. For Q1 of 2017, Royal Caribbean is forecasting adjusted EPS of $0.90.

Health Care

Health care funds were lower, behind the broader market. Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were weaker. Meanwhile, Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.2%.

Avinger (AVGR) jumped 31.5% after the company late Wednesday announced positive data from a study into its Lumivascular technology. The VISION study was designed to evaluate the safety and effectiveness of the company's Pantheris system to perform directional atherectomy while for the first time ever allowing physicians to use real-time intravascular imaging to aid in the removal of plaque from diseased lower extremity arteries. The trial met all primary and secondary safety and effectiveness endpoints.

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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