Mid-Day ETF Update: ETFs, Stocks Remain In the Red on Dismay Over Stalled Fiscal Talks

Active broad-market exchange-traded funds at mid-day:

iShares MSCI Emerging Markets Index ( EEM ): -1.5%

PowerShares QQQ Trust, Series 1 ( QQQ ): -1.5%

iShares Russell 2000 Index ( IWM ): -1%

Direxion Daily Small Cap Bear 3X Shares ( TZA ): +3.1% from near year lows

iShares MSCI EAFE Index Fund ( EFA ): -1%

Broad Market Indicators

Broad-market exchange-traded funds, including SPY, IWM, IVV and others, are mostly lower. Actively traded PowerShares QQQ ( QQQ ) is down 1.5%.

U.S. stocks continue to slip farther into the negative zone after so-called 'fiscal cliff' negotiations ground to a halt, with House Republicans cancelling the so-called Plan B vote because it failed to garner enough support from members. The bill sought to raise taxes on households earning more than $1 million, as well as extend tax cuts for those earning less. Boehner, at a press conference earlier Friday, said that the Congress, the Senate and President Barack Obama should continue to work to avoid the 'fiscal cliff'. With investors fixated on the fiscal talks, upbeat economic data were more or less bypassed. November durable-goods orders were up 0.7%, above economists' forecasts; core capital-goods orders, consumer spending and personal income also increased. October durable-goods orders was revised to a 1.1% increase, while income and spending were also revised slightly upward. Meanwhile, the University of Michigan-Thomson Reuters consumer-sentiment gauge fell to the lowest level since July, to 72.9.

Winners and Losers

Financial -

Select Financial Sector SPDRs (XLF) is down 1.4%, from near year highs. Direxion Daily Financial Bull 3X shares (FAS) is down 3.8%. Its bearish counterpart, FAZ, is up 3.9% from near year lows.

Among financial stocks, Aviva Plc (AV) is down 1.35% from near year highs after saying it will sell its US life and annuities business, Aviva USA, and related asset management operations, to Athene Holding Ltd. for $1.8 billion or GBP 1.1 billion. Aviva will retain the North American asset management activities of Aviva Investors that are focused on third parties, and Aviva plc assets outside of the USA. The company will receive sale proceeds of $1.55 billion or GBP 1 billion in cash, after the repayment of external debt. Of this, an amount of up to $250 million may be received in the form of an interest-bearing vendor loan, repayable in cash within 12 months of completion. Cash proceeds will increase central group liquidity and will be used for general corporate purposes.

Technology -

Tech ETFs are weaker in mid-day action: Technology Select Sector SPDR ETF (XLK), down 1.4%; iShares Dow Jones US Technology ETF (IYW), down 1.25%; iShares S&P North American Technology ETF (IGM), down 1.3%; and iShares S&P North American Technology-Software Index (IGV) is down 0.5%.

Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) is down 1.8%; and Semiconductor Sector Index Fund (SOXX) is down 1.3%. SPDR S&P International Technology Sector ETF (IPK) is down 1.3%.

In sector news, Research In Motion (RIMM) shares have tumbled 20% on concerns about a fall in its subscriber base although it reported a better than expected quarterly result after trade yesterday.

Industrial -

Industrial ETFs are in the red: Vanguard Industrials (VIS), down 1%; iShares Trust Dow Jones U.S. Industrial Sector Index Fund (IYJ), down 0.9% and Select Sector SPDR-Industrial (XLI), down 1%.

Among stocks, Quanex Building Products (NX) is down near 10% but still at the high end of its 52 week range after it reported Q4 earnings of $0.05 per share, ex one-time items, versus the Capital IQ consensus of $0.21. Revenues were $235 mln, versus the analyst estimate of $244.86 mln.

Commodities -

Crude was down 1.93%; natural gas was down 0.48%. United States Oil Fund (USO) is down 1.5%. United States Natural Gas Fund (UNG) has turned positive and is now up 0.3%.

Gold was up 0.54% and silver was up 1.46%. Among rare metal funds, SPDR Gold Trust (GLD) is up 0.6%; iShares Silver Trust (SLV) is up 0.8%.

Consumer -

Consumer ETFs continue to be weaker: Consumer Staples Select Sector SPDR (XLP), down 1.3%; iShares Dow Jones US Consumer Goods (IYK), down 1.1%; and Vanguard Consumer Staples ETF (VDC), down 1.4%.

Retail ETFs are lower: SPDR S&P Retail (XRT), down 1.5%; PowerShares Dynamic Retail (PMR), down 1.3%; and Market Vectors Retail ETF (RTH), down 1.6% having earlier hit a new 52 week high.

In sector news, Walgreen (WAG) is now down more than 4% after it reported Q1 earnings of $0.58 per share, ex one-time items, versus the Capital IQ consensus of $0.70. Revenues were $17.3 bln, versus the analyst estimate of $17.56 bln.

Power Play -

Healthcare -

Healthcare ETFs are weaker: Health Care SPDR (XLV), down 1%, Vanguard Health Care ETF (VHT), down 1%; and iShares Dow Jones US Healthcare (IYH), down 0.80%. Biotech ETF iShares NASDAQ Biotechnology Index (IBB) is down 1.25%.

In corporate news, Halozyme Therapeutics Inc. (HALO) is up 26% but still off day highs following the company's announcement that it had entered into a worldwide license agreement with Pfizer Inc. (PFE). The deal is to develop products combining proprietary PFE biologics with HALO's Enhanze technology.

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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