Active broad-market exchange-traded funds in Wednesday's regular session:
SPDR S&P 500 ( SPY ): +0.3%
iShares MSCI Emerging Index Fund ( EEM ): +0.8%
VIX Short-Term Futures ETN Ipath ( VXX ): -2.5%
SPDR Select Sector Fund - Financial ( XLF ): +0.4%
3X Long Crude ETN Velocityshares ( UWTI ): -10.4%
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 trimmed earlier gains at session's half, with market sentiment souring as crude oil prices fell following a report from the Department of Energy of an increase in commercial supplies over prior-week levels of 4.8 million barrels during the seven days ended Dec. 11 compared with expert opinion looking for a 2.5 million barrel decline.
In economic data, November housing starts increased 10.5% to a seasonally-adjusted annual rate of 1.173 million, beating expectations for a 1.141 million yearly pace. October levels also were revised slightly higher to an annualized 1.062 million homes from initially reports of a 1.060 million rate. The number of building permits pulled during November increased 11.0% to an annualized rate of 1.289 million, beating the consensus estimate looking for a 1.146 million pace. October was also revised upward to a 1.161 million annual rate from 1.150 million.
In the manufacturing sector, industrial production contracted 0.6% during November, significantly weaker than the 0.2% contraction the markets were expecting. October production also was revised lower to a 0.4% decline from initial reports of a 0.2% drop. Capacity utilization also slowed to 77.0% from 77.5% in October, missing estimates for a smaller decline to 77.4%.
Also, the purchasing manager's index for the manufacturing sector fell to a preliminary 51.3 reading from November's final 52.6 score. Analysts had expected a slight improvement to a 52.8 flash reading this month.
Investors are still looking ahead to the Federal Reserve's decision on whether or not to increase interest rates. The announcement will be made at 2 p.m. ET and will be followed by a news conference with Fed Chair Janet Yellen at 2:30 p.m. ET.
Power Play: Health Care
Health care funds were in the green, in line with the broader market. Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were higher. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was up 0.8%.
Advaxis (ADXS) was up 31.8% after the clinical-stage biotechnology company said the U.S. Food and Drug Administration has lifted the clinical hold on all of its Investigational New Drug applications for its three product candidates. Advaxis will therefore resume all clinical trials with axalimogene filolisbac to treat HPV-related cancers, ADXS-PSA and ADXS-HER2. In October of 2015, Advaxis received notification from the FDA that its IND applications for axalimogene filolisbac were put on clinical hold in response to the company's submission of a safety report to the FDA. Following discussions with the regulator, the company agreed to implement certain risk mitigation measures, including revised study protocol inclusion/exclusion criteria, post-administration antibiotic treatment and patient surveillance and monitoring measures.
Winners and Losers
Funds in the financial sector were weaker, lagging behind the broader market. Select Financial Sector SPDRs ( XLF ) was up 0.4%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.9%; Direxion Daily Financial Bear 3X Shares (FAZ) was down 1.1%.
Resource Capital (RSO) was up 9% after it said late Monday that it will pay a quarterly cash dividend on its common stock of $0.42 per share on Jan. 28 to shareholders of record on Dec. 31. The company lowered its dividend rate by 34% from the $0.64 per share paid for the previous quarter. "For 2016, the company projects GAAP net income of $1.60 - $1.80 per common share, and AFFO of at least $2.65 per common share, which represents 1.57 times coverage of the dividend declared today. The company expects to stabilize book value at approximately $18 per common share," the company said in a statement. "The company intends to continue to opportunistically repurchase its securities in a highly accretive manner. The projected AFFO represents a 14.7% return on book value and a 26.1% return on the current market price."
Tech funds were higher, but slightly behind 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 higher. Meanwhile, SPDR S&P International Technology Sector ETF (IPK) was down 2.4%.
Semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.1%, while Semiconductor Sector Index Fund (SOXX) was down 0.2%.
ANADIGICS (ANAD) rose 29.7% after it said its board has received a superior takeover proposal to an offer by GaAs Labs, with an unnamed bidder offering $0.48 a share in cash.The offer, which came during the "go-shop" period, tops GaAs Labs' $0.35 bid. ANADIGICS said it has notified GaAs Labs its intention to effect a change of recommendation and to terminate the merger Agreement. Under the merger timetable, GaAs Labs now has a five day period to come up with a new proposal.
Energy funds were lower,underperforming the broader market. Dow Jones U.S. Energy Fund (IYE) was down 1.2% and Energy Select Sector SPDR (XLE) was down 1.1%.
TerraForm Power, Inc. (TERP) was up 4.4% after it said that it has closed the acquisition of 832 megawatts of wind power plants from Invenergy Wind LLC, an independent wind energy company, for an aggregate consideration of $1.96 billion. The wind portfolio consists of seven wind farms in the U.S. and Canada totaling 930 megawatts of capacity, of which, only 832 megawatts are operational and the other 98 megawatts are expected to reach commercial operation and to be subsequently acquired by TerraForm by April 2016. In connection with the transaction, the company has secured financing from a syndicate of bands in the form of a $500 million non-recourse term loan that is secured by the equity interests in Invenergy's wind assets and certain other assets. The term loan carries an interest rate of LIBOR plus 5.5%, subject to a 1% LIBOR floor, and will mature in January 2019. Once all projects are operational, the company expects to generate first year adjusted EBITDA of $147 million.
Crude was down 4.3%. United States Oil Fund (USO) was down 3.3%. Natural gas was down 0.2%. United States Natural Gas Fund (UNG) was down 0.6%. Gold was up 1.3% and SPDR Gold Trust (GLD) was up 1.3%. Silver was up 3.1% and iShares Silver Trust (SLV) was up 3.1%.
Consumer staples funds were in positive territory, matching 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 green.
Consumer discretionary and retail funds were also firmer, in line 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 higher.
Scientific Games Corp (SGMS) was up 9% after it said late Tuesday that it will promote Michael Quartieri to Executive Vice President, Chief Financial Officer, and Secretary, succeeding Scott Schweinfurth. Quartieri joined Scientific Games last month as Vice President and Corporate Controller.
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