Active broad-market exchange-traded funds in Tuesday's regular session:
SPDR S&P 500 ( SPY ): -0.31%
iPath S&P 500 VIX ST Futures ETN ( VXX ): -0.41%
iShares MSCI Emerging Markets Index ( EEM ): -0.23%
Market Vectors Gold Miners ( GDX ): +2.09%
PowerShares QQQ Trust, Series ( QQQ ): -0.37%
Broad Market Indicators
Broad-market exchange-traded funds, including SPY, IWM and IVV were weaker. Likewise, actively traded PowerShares QQQ ( QQQ ) was down 0.37%.
U.S. stocks turned negative at session's half. The sell-off in equities was sparked by geopolitical issues: tensions between Ukraine and Russia flared up once again after Russia sent a convoy to eastern Ukraine, insisting that it was bringing aid. However, the government in Kiev said it will not allow the convoy to pass, and accused it of carrying military gear instead of aid. Meanwhile, violence continued to escalate in the Middle East, as ISIS and Kurdish forces clashed in Iraq.
Back home, investors digested economic data released earlier. Bureau of Labor Statistics had reported that job openings in June rose to 4.67- the largest increase since early 2001. The National Federation of Independent Business also said that small business sentiment in July edged 0.7 points higher to a reading of 95.7.
Power Play: Health Care
Health Care SPDR (XLV), iShares Dow Jones US Healthcare (IYH) and Vanguard Health Care ETF (VHT) were in the red . Biotech ETF iShares NASDAQ Biotechnology Index (IBB) was down 0.78%.
Dendreon (DNDN) was down 35.85% despite the biotechnology company's late Monday release of better-than-expected Q2 results, as the company also warned in the quarterly filing it is considering alternatives to the repayment of its 2016 notes in cash that include "alternatives that could result in leaving our current stockholders with little or no financial ownership of Dendreon."
For Q2 2014, the company posted a net loss of $15.3 million, or $0.10 per share, compared with a prior-year net loss of $68.8 million, or $0.45 per share. Analysts polled by Capital IQ were looking for a loss of $0.22 per share, on average. Total revenue climbed 12% to $82.2 million, above analysts' $73.1 million mean estimate.
However, the company said with its 2016 notes of $620 million maturing on Jan. 15, 2016 and its stock price below the $51.24 effective conversion price for the 2016 notes, it is unlikely that the holders of the 2016 Notes will exercise their conversion right. As a result, the company would be required to repay the full $620 million principal amount at maturity, but based on its currently anticipated operating results, "and even assuming the realization of future expense reductions that we plan to make and product revenues that we forecast, there is a significant risk that, while we believe we have sufficient cash to meet our ordinary course obligations for at least the next 12 months, we will not be able to repay or refinance the 2016 notes," it said.
In turn, the company warned: "we are currently considering alternatives to the repayment of the 2016 Notes in cash, including alternatives that could result in leaving our current stockholders with little or no financial ownership of Dendreon."
Winners and Losers
Select Financial Sector SPDRs (XLF) was up 0.18%. Direxion Daily Financial Bull 3X shares (FAS) was up 0.33% while its bearish counterpart, FAZ, was down 0.33%.
Triangle Capital (TCAP) was down 3% after the investor in middle-market companies priced an underwritten public offering of 4.3 million shares of common stock, upsized from an initially expected 4 million shares, at a price of $26.85 per share. The price is a 2.9% discount to the stock's Monday closing price.
TCAP was down 3.5% at $26.68 in recent pre-market trading , in a 52-week range between $24.68 and $30.42.
Net proceeds from the offering are expected to be approximately $111 million. The company said it intends to use the net proceeds of the public offering to make additional investments in lower middle market companies in accordance with its investment objective and strategies, and for working capital and general corporate purposes.
The underwriters have been granted an option, exercisable for 30 days, to purchase up to 645,000 additional shares of common stock.
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 lower. SPDR S&P International Technology Sector ETF (IPK) was flat.
Among semiconductor ETFs, SPDR S&P Semiconductor (XSD) was down 0.98% and Semiconductor Sector Index Fund (SOXX) was down 0.77% .
NII Holdings (NIHD) was down 70.39% and earlier sank to a record low, after the company said late Monday that it may file a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in order to implement a restructuring of its obligations on a stand-alone basis or in conjunction with one or more potential strategic transactions.
In its earnings report for Q2 ended June 30, 2014, the provider of wireless communication services under the Nextel brand cited its financial performance in combination with the potential impact of its inability to satisfy certain financial covenants under the company's existing debt obligations.
NIHD reported Q2 loss of $3.65 per share, versus $2.23 loss per share in the same period last year, and below the CIQ consensus estimate of $2.30 loss per share. Revenue was $968.8 million, down 23.1% from $1.26 billion in the comparable quarter the previous year. The Street view is for revenue of $930.29 million.
Dow Jones U.S. Energy Fund (IYE) was down 0.86%; Energy Select Sector SPDR (XLE) was down 0.87%.
USA Compression Partners (USAC) was up 3.38% after it reported Q2 earnings that beat Street estimates by $0.08 per share and record revenues that increased 59.9% year-on-year but were slightly below the consensus of analysts polled by Capital IQ. The provider of natural gas compression services posted Q2 net income of $7.5 million, or $0.20 per diluted share, beating EPS estimates of $0.12 per share. For the same period last year, USAC reported net income of $2.4 million, or $0.08 per diluted share. Revenue totaled $53.3 million, slightly missing Capital IQ estimates of $53.5 million and up from $33.3 million for the same quarter last year.
The company also confirmed its FY14 guidance with adjusted EBITDA expected in a range of $109 million-$115 million and distributable cash flow in a range of $75 million-$81 million.
Crude was down 0.74%; United States Oil Fund (USO) was down 0.61%. Natural gas was down 0.93% and United States Natural Gas Fund (UNG) was up 0.46%.
Gold was down 0.40%, and silver was up 0.88%. Among rare metal funds, SPDR Gold Trust (GLD) was up 0.4% and iShares Silver Trust (SLV) was down 0.08%.
Consumer Staples Select Sector SPDR (XLP), iShares Dow Jones US Consumer Goods (IYK), and Vanguard Consumer Staples ETF (VDC) were firmer.
Flowers Foods (FLO) was down 4.45% after reporting lower-than-expected results for Q2 ended July 12. It has also revised downward its earnings and sales estimates for fiscal 2014. The bakery company said adjusted net income came in at $45 million, or $0.21 per diluted share, down from adjusted net income of $50.1 million, or $0.24 per diluted share, a year earlier, trailing the Capital IQ consensus of $0.23. Sales for the quarter totaled $877.4 million, a decrease from last year's $898.2 million, falling short of the average analyst estimate of $933 million compiled by Capital IQ.
The company revised its outlook for fiscal 2014 to a range of $3.88 billion to $3.94 billion for sales and $0.92 to $0.98 for adjusted EPS. Previously, adjusted EPS guidance was set at $0.98 to $1.05 on sales of $3.976 billion to $4.126 billion. Analysts are expecting adjusted EPS of $1.02 on sales of $4 billion.
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