Active broad-market exchange-traded funds in Tuesday's regular session:
SPDR S&P 500 ( SPY ): -0.20%, but near its all-time high
iShares Russell 2000 Index ( IWM ): -0.72%
iShares MSCI Emerging Markets Index ( EEM ): +0.62%
PowerShares QQQ Trust, Series 1 ( QQQ ): -0.19%, near its 13-year high
Direxion Daily Small Cap Bear 3X Shares ( TZA ): +2.21%
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM and IVV were lower. Actively traded PowerShares QQQ ( QQQ ) edged down 0.19%, but edged closer to its 13-year high.
U.S. stocks were lower, within a very narrow intra-day range, shrugging off the upbeat U.S. factory orders data. The Commerce Department reported that orders for factory-produced goods rose 0.7% in April, above expectations. Orders for nondurable goods were up 0.7%. Market sentiment continued to be downcast despite strong U.S. auto sales during the month of May. The increases in auto sales would suggest that winter weather may be more to blame for sluggish sales earlier this year than a drop in consumer spending.
Power Play: Energy
Dow Jones U.S. Energy Fund (IYE) and Energy Select Sector SPDR (XLE) were firmer, nearing record highs.
Among stocks, Saratoga Resources (SARA) surged 56% after the company provided an update on its recent Rocky 3 horizontal development well in Breton Sound Block 32 field and recompletion in the QQ #24 well in Main Pass Block 47 field. The company said the Rocky 3 well tested on May 30, 2014 at a gross equivalent rate of 1,531 barrels of oil per day and 240,000 cubic feet of gas per day, or net 1,288 barrels of oil equivalent per day, on 20/64" choke with flowing tubing pressure of 780 psi. This exceeded the company's expectations.
Winners and Losers
Financial
Select Financial Sector SPDRs (XLF) was down 0.13%, near multi-year highs. Direxion Daily Financial Bull 3X shares (FAS) was down 0.53%. Its bearish counterpart, FAZ, was up 0.63%.
Among sector news, PHH Corporation (PHH) was down more than 17% after it said it entered into a definitive agreement to sell its Fleet Management Services business, doing business as PHH Arval, to Element Financial Corporation for approximately $1.40 billion in cash. The transaction is expected to close on or before July 31. The deal is structured as a stock-for-cash transaction, but will be treated as an asset sale for tax purposes. PHH expects to record an after-tax gain of approximately $250 million to $300 million, and net proceeds after taxes and transaction expenses are expected to be approximately $750 million to $800 million. PHH expects to use the net proceeds to re-engineer its operations and support infrastructure and make selective growth investments in its mortgage business, return capital to shareholders, and reduce its unsecured debt levels.
Technology
Technology Select Sector SPDR ETF (XLK) and iShares Dow Jones US Technology ETF (IYW) were weaker, but both hit their 13-year highs; 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 flat.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) and Semiconductor Sector Index Fund (SOXX) edged higher.
In corporate news, InterDigital (IDCC) was up 20% after the designer and developer of advanced technologies for wireless communications raised its expectations for Q2, now seeing revenues to be between $72 million and $80 million, up from the previous guidance range of $55 million - $57 million . Analysts polled by Capital IQ are expecting revenue of $53.42 million. Total revenue is expected to be $172 million - $210 million, which includes past sales of $100 million - $130 million. The prior guidance was for total revenue of $65 million - $72 million, including past sales of $10 million - $15 million.
Separately, the company said its patent licensing subsidiaries have entered into a patent license agreement with Samsung Electronics Co., Ltd. The multi-year agreement also resolves all pending litigation between the companies. The royalty-bearing license agreement sets forth terms covering the sale by Samsung of 3G, 4G and certain future generation wireless products.
Commodities
Crude was down 0.05%; United States Oil Fund (USO) was down 0.08%. Natural gas was down 0.02% and United States Natural Gas Fund (UNG) was up 0.12%.
Gold was up 0.07% and silver was up 0.06%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.13% and iShares Silver Trust (SLV) was up 0.08%.
Health Care
Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) edged lower. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 0.35%.
In corporate news, Acadia Healthcare Company (ACHC) was up 15% after it said it agreed to buy Partnerships in Care, the second-largest provider of inpatient behavioral healthcare services in the U.K., for $660 million in cash. The company said the acquisition should boost earnings by approximately $0.17 to $0.20 per diluted share for the second half of 2014 and $0.40 to $0.46 per diluted share for 2015. The accretion expectations do not include the impact of any future acquisitions, or transaction-related expenses, it said.
Consumer
Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were weaker.
Retail ETFs SPDR S&P Retail (XRT) and Market Vectors Retail ETF (RTH) were also lower. PowerShares Dynamic Retail (PMR) was flat.
Among stocks, the Board of Directors of Hillshire Brands (HSH) has been authorized by independent legal and financial advisors to provide information and conduct separate discussions with Pilgrim's Pride Corporation (PPC) and Tyson Foods (TSN) related to their unsolicited proposals.
Hillshire Brands is subject to a merger agreement with Pinnacle Foods (PF) under which Hillshire agreed to acquire Pinnacle, and both the Pilgrim's Pride and Tyson Foods proposals are conditioned on the termination of that merger agreement. Hillshire Brands does not have the right to terminate the Pinnacle Foods merger agreement on the basis of either of the proposals or enter into an alternative acquisition agreement with either of these parties prior to termination. The Hillshire Brands Board of Directors is not withdrawing, modifying, withholding or qualifying its recommendation with respect to the Pinnacle merger agreement or proposing to do so, and is not making any recommendation on the Pilgrim's Pride or Tyson Foods proposals.
HSH shares were up 9%; PPC, down 1.62%; TSN, down 2%; and PF, up 0.25%.
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.
