Mid-Day ETF Update: ETFs, Stocks Rally with Major Indices Hitting Record Highs Following Strong Economic Data

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

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

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

iPath S&P 500 VIX Short Term Futures ETN ( VXX ): +2.3%

iShares MSCI Emerging Index Fund ( EEM ): +0.7%

Direxion Daily Junior Gold Miners Index Bull 3X Shares ( JNUG ): -1.3%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.2%.

U.S. stocks were in positive territory at session's half, as the major stock indices set new record highs again for a fifth consecutive day - fueled by economic data that highlighted the strength of the U.S. economy.

Bullish data overshadowed Fed Chair Janet Yellen's semi-annual testimony to Congress - Yellen echoed her remarks to the Senate on Tuesday that the economy is on track for additional, albeit gradual, rate hikes in 2017.

Consumer prices rose 0.6% in January, twice the increase Wall Street was expecting. Excluding the volatile food and fuel segment, CPI was up a better-than-expected 0.3%.

Retail sales were up 0.4% last month versus the estimated +0.1%. Excluding autos, sales were up 0.8%, and up 0.7% excluding autos and gas sales, both beating expectations.

The Empire State manufacturing index raced up to 18.7 in February from 6.5 the month prior, well above estimates for a gain to 7.5, and business inventories increased 0.4% while sales were up 0.2%, the largest monthly gain in six years.

Meanwhile, industrial production and capacity utilization declined, and the National Association of Home Builders housing market index fell to 65 in February from 67 the month prior, missing projections for an improvement to 68.

Power Play: Health Care

Health care funds were higher, ahead of the broader market. Health Care SPDR (XLV), Vanguard Health Care ETF (VHT) and iShares Dow Jones US Healthcare (IYH) were in the red. Meanwhile, Biotechnology fund iShares NASDAQ Biotechnology Index (IBB) was up 0.5%.

Evoke Pharma (EVOK) was up 50.6% after the company said it has received a letter from the Food and Drug Administration exempting its late stage product Gimot from a human factors validation study requirement prior to submission of a new drug application. Gimoti is a nasal delivery of metoclopramide for the relief of symptoms associated with acute and recurrent diabetic gastroparesis in adult women. The FDA had published new guidance in February of 2016 that required drug products classified as a drug/device combination, such as Gimoti, undergo evaluation that may require an HF Validation study as described in FDA's guidance.

Subsequently, Evoke submitted an assessment report to the FDA regarding the need for such a study and FDA agreed that Evoke had adequately considered the risks associated with the proposed Gimoti nasal spray and determined that an HF Validation study is not needed at this time.

Winners and Losers


Select Financial Sector SPDRs ( XLF ) was up 0.7%. Direxion Daily Financial Bull 3X shares (FAS) was up 1.1%, while its bearish counterpart, FAZ, was down 1%.

Blackstone Mortgage Trust (BXMT) was down 1.5% after it reported Q4 core EPS of $0.62 compared with $0.68 a year earlier. That was less than the $0.63 expected by analysts in a Capital IQ poll. Revenue fell to $71.84 million from $82.1 million a year earlier, compared with $77.3 million anticipated on average by analysts.


Tech stocks were higher, in line with 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 in positive territory. Meanwhile, SPDR S&P International Technology Sector ETF (IPK) was flat.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was up 0.9% and Semiconductor Sector Index Fund (SOXX) was up 0.6%. (WIX) was up 16.4% to a new 52-week high after it reported adjusted Q4 EPS of $0.06, three pennies better than average estimate compiled by Capital IQ, and above the $0.13 loss reported a year earlier. The company reported Q4 revenues of $84.2 million, above the Street view of $81.7 million, and also above the $56.8 million reported a year earlier. In guidance, the company said it expects Q1 revenue of $89 million to $90 million, above the Street view of $85.0 million. For 2017, the company expects revenue of $409 to $411 million, above the Street view of $382.7 million.


Dow Jones U.S. Energy Fund (IYE) was down 0.4% and Energy Select Sector SPDR (XLE) was down 0.4%.

World Fuel Services (INT) was down 13.5% to a new one-year low after the company reported Q4 adjusted EPS fell to $0.21 from $0.73 in the same period a year earlier. It missed the $0.60 per share consensus expected by analysts in a Capital IQ poll. Revenue was $7.79 billion compared with $6.73 billion a year earlier. That was higher than the $7.47 billion average estimate of analysts. For FY17, the company expects adjusted EPS of $2.55 to $2.90 per share, below the $3.04 per share consensus.


Crude was down 0.2%. United States Oil Fund (USO) was down 0.2%. Natural gas was up 1.8% while United States Natural Gas Fund (UNG) was up 0.6%.

Gold was up 0.5%. SPDR Gold Trust (GLD) was up 0.3%. Silver was up 0.3% while iShares Silver Trust (SLV) was up 0.1%.


Consumer staples funds were in the green, in line with the broader market. Consumer Staples Select Sector SPDR (XLP), Vanguard Consumer Staples ETF (VDC), and iShares Dow Jones US Consumer Goods (IYK) were higher.

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 firmer.

Groupon (GRPN) was up 22.8% after it reported Q4 non-GAAP net income of $0.07 per share, up from $0.04 for the same quarter last year, and beating the Capital IQ forecast of $0.03. Revenues for the quarter were $934.9 million, up from $917.2 million for the year-ago period, and ahead of the analyst forecast of $913.7 million. The company said it expects full-year 2017 gross profits of between $1.3 billion and $1.35 billion, and adjusted EBITDA of $200 million to $240 million.

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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