Mid-Day ETF Update: ETFs, Stocks Maintain Rally as Upbeat Earnings, Tax Reform Expectations Lift Market Sentiment

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

Direxion Daily Gold Miners Index Bull 3X Shares ( NUGT ): -15.2%

Direxion Daily Junior Gold Miners Index Bull 3X Shares ( JNUG ): -17.9%

VanEck Vectors Gold Miners ETF ( GDX ): -5.2%

SPDR Select Sector Fund - Financial ( XLF ): -0.6%

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

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.7%.

U.S. stocks held on to their gains at session's half, on the back of upbeat earnings from Dow component stocks DuPont (DD), Caterpillar (CAT), McDonald's (MCD) and 3M (MMM), as well as expectations for corporate tax reform.

The Nasdaq Composite breached the 6,000 milestone with record highs in three of the four FANG stocks; Facebook (FB), Netflix (NFLX) and Alphabet (GOOG, GOOGL). The Dow and S&P 500 were at their highest levels in more than seven weeks.

In economic data news, new home sales rose to a 2.5 year high of 621,000 units, and the Federal Housing Finance Agency house price index increased by twice what was expected. The Case Shiller house price index was up 0.7% in February, but just below +0.8% estimates.

Also, consumer confidence ebbed in April but remained at an elevated level, and the Richmond Fed manufacturing index declined by less than what was expected.

Power Play: Health Care

Health care funds Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were higher. Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 1.4%.

Epizyme (EPZM) was up 16.1% after the company said the US Food and Drug Administration has granted fast track designation to tazemetostat for the treatment of patients with relapsed or refractory follicular lymphoma. The designation is intended to provide expedited processes for the development and FDA review of drugs that may reduce development time and costs associated with bringing a drug to market.

Winners and Losers


Select Financial Sector SPDRs ( XLF ) was up 0.9%. Direxion Daily Financial Bull 3X shares (FAS) was up 2%, while its bearish counterpart, FAZ, was down 2.1%.

Citigroup (C) was up 1.3% after it said that the Saudi Arabian Capital Market Authority has granted it a license to offer investment banking and other related services in Middle Eastern country. The company will rebrand its business as Citigroup Saudi Arabia, which will provide a full range of investment banking, debt and equity capital markets, and securities research capabilities.


Tech funds 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 up 0.9%..

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 1.2% and Semiconductor Sector Index Fund (SOXX) was up 0.9%.

Straight Path Communications (STRP) was up 12.6% after it said an unsolicited offer from an unnamed multi-national telecommunications company to acquire it for $104.64 per share in an all-stock transaction constitutes a "superior proposal" as defined in its previously announced definitive agreement and plan of merger with AT&T Inc. (T). The merger deal with AT&T had the telecoms company agree to buy the company for $95.63 per share. Under the AT&T merger agreement, Straight Path is required to pay a $38 million termination fee to AT&T if it terminates the deal in order to enter into an agreement with the bidder. The company said the bidder has agreed to pay the termination fee to AT&T on Straight Path's behalf.


Select Sector SPDR-Industrial (XLI) , Vanguard Industrials (VIS) and iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ) were higher.

AK Steel Holding (AKS) was down 8.6% after it reported Q1 revenue of $1.53 billion, versus $1.52 billion for the same period last year, topping the $1.49 billion Capital IQ consensus. EPS was $0.19, versus a loss per share of $0.08 last year. This was ahead of the $0.14 per-share earnings that analysts polled by Capital IQ were expecting.


Dow Jones U.S. Energy Fund (IYE) was up 0.5% and Energy Select Sector SPDR (XLE) was up 0.3%.

Valero Energy (VLO) was down 2% after it reported Q1 adjusted net profit of $0.68 per share, compared to $0.60 per share in the prior year period. Capital IQ provided a Street estimate of $0.60 earnings per share. Operating revenues were $21.77 billion, up from $15.71 billion reported for the same period last year. The Street estimate was for revenues of $19.15 billion.


Crude was up 0.1%. United States Oil Fund (USO) was up 0.1%. Natural gas was down 0.5% while United States Natural Gas Fund (UNG) was down 0.8%.

Gold was down 0.9%. SPDR Gold Trust (GLD) was down 1%. Silver was down 1.6% while iShares Silver Trust (SLV) was down 1.8%.


Consumer Staples Select Sector SPDR (XLP) and other consumer staples funds Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) were firmer.

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.

Tupperware Brands (TUP) was up 12.3% after it reported Q1 diluted earnings per share of $1.01, up from $0.91 for the same period last year, and ahead of the Capital IQ consensus forecast of $0.94. Revenues for the quarter were $554.8 million, up from $525.7 million in the year-ago quarter, and beating the analyst forecast of $532.6 million. The company said it expects full-year 2017 adjusted EPS in a range of $4.67 to $4.77, above the $4.56 per share average estimate, on sales growth of 3% to 5%. It also forecast Q2 adjusted EPS in a range of $1.17 to $1.22, straddling the $1.10 per share consensus, on sales growth of 2% to 4%.

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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